A bill to amend the Internal Revenue Code of 1954 to provide special rules for discharge of qualified farm indebtedness of solvent farmers.

Summary

Amends the Internal Revenue Code to exclude from gross income the discharge of qualified farm indebtedness of a solvent taxpayer farmer. Defines "qualified farm indebtedness" as indebtedness of a taxpayer if: (1) such indebtedness was incurred directly in connection with the operation by the taxpayer of the trade or business of farming, or secured by farmlands or farm equipment used in such trade or business; (2) 50 percent or more of the annual gross receipts of the taxpayer for the three taxable years preceding the taxable year in which the discharge of such indebtedness occurs is attributable to the trade or business of farming; and (3) immediately before such discharge occurs, the taxpayer has a debt to equity ratio of at least seven to three. Sets forth ordering rules with respect to the use of qualified farm indebtedness to make basis adjustments.

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1 official file

• Introduced in House

  summary · EN · 11 June 1986

  Open at official source

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