Page:United States Statutes at Large Volume 100 Part 3.djvu/545

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2353

business. Any such election, once made, may be revoked only with the consent of the Secretary. "(e) DEFINITIONS AND SPECIAL RULES FOR PURPOSES OF SUBSECTION

(d)."(1) RECAPTURE OF EXPENSED AMOUNTS ON DISPOSITION.—

"(A) IN GENERAL.—In the case of any plant or animal with respect to which amounts would have been capitalized under subsection (a) but for an election under subsection (d)(3)"(i) such plant or animal (if not otherwise section 1245 property) shall be treated as section 1245 property, and "(ii) for purposes of section 1245, the recapture amount shall be treated as a deduction allowed for depreciation with respect to such property. "(B) RECAPTURE AMOUNT.—For purposes of subparagraph (A), the term 'recapture amount' means any amount allowable as a deduction to the taxpayer which, but for an election under subsection (d)(3), would have been capitalized with respect to the plant or animal. "(2) EFFECTS OF ELECTION ON DEPRECIATION.—

"(A) IN GENERAL.—If the taxpayer (or any related person) makes an election under subsection (d)(3), the provisions of section 168(g)(2) (relating to alternative depreciation) shall apply to all property of the taxpayer used predominantly in the farming business and placed in service in any taxable year during which any such election is in effect. "(B) RELATED PERSON.—For purposes of subparagraph (A), the term 'related person' means— "(i) the taxpayer and members of the taxpayer's family, "(ii) any corporation (including an S corporation) if 50 percent or more (in value) of the stock of such corporation is owned (directly or through the application of section 318) by the taxpayer or members of the taxpayer's family, "(iii) a corporation and any other corporation which is a member of the same controlled group described in section 1563(a)(1), and "(iv) any partnership if 50 percent or more (in value) of the interests in such partnership is owned directly or indirectly by the taxpayer or members of the taxpayer's family. "(C) MEMBERS OF FAMILY.—For purposes of this paragraph, the term 'family' means the taxpayer, the spouse of the taxpayer, and any of their children who have not attained age 18 before the close of the taxable year. "(3) PREPRODUCTIVE PERIOD.—

"(A) IN GENERAL.—For purposes of this section, the term 'preproductive period' means— "(i) in the case of a plant or animal which will have more than 1 crop or yield, the period before the 1st marketable crop or yield from such plant or animal, or "(ii) in the case of any other plant or animal, the period before such plant or animal is reasonably expected to be disposed of.

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