A bill to amend the Internal Revenue Code of 1986 to restore income averaging for farmers, to restore the investment tax credit and accelerated cost recovery for property used in the trade or business of farming, and for other purposes.

Summary

Amends the Tax Reform Act of 1986 to repeal provisions which eliminated the allowance of income averaging for farmers. Specifies that the Internal Revenue Code shall be applied and administered as if such provisions had not been enacted. Specifies that income averaging shall be allowed only for farmers who: (1) are actively engaged in the trade or business of farming; and (2) have 50 percent or more of their annual gross income for the three preceding taxable years attributable to such trade or business. Amends the Internal Revenue Code to allow an investment tax credit for qualified farm property. Defines "qualified farm property" as any property which is used in the trade or business of farming. Provides special rules for qualified farm property to allow such property (at the election of the taxpayer) to be depreciated according to the accelerated cost recovery system in effect prior to the enactment of the Tax Reform Act of 1986. Reduces to 20 percent the maximum rate of tax on net capital gains realized from the sale of timber by individuals. Reduces to 28 percent the maximum rate of tax on net capital gains realized from the sale of timber by corporations.

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1 official file

• Introduced in Senate

  summary · EN · 4 February 1987

  Open at official source

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