Page:United States Statutes at Large Volume 70.djvu/898

 842

PUBLIC LAW 880-AUG. 1, 1956

[70 S T A T,

C O M P U T A T I O N OF S E L F - EMPLOYMENT I N C O M E BY F A R M OPERATORS

26 USC 1402.

26 USC 3121.

26 USC 707. 26 USC 702.

26 USC 707. 26 USC 702.

(j) Subsection (a) of section 1402 of the Internal Revenue Code of 1954 is amended by striking out the last two sentences thereof and inserting in lieu thereof the following: "In the case of any trade or business which is carried on by an individual or by a partnership and in which, if such trade or business were carried on exclusively by employees, the major portion of the services would constitute agricultural labor as defined in section 3121(g) — "(i) in the case of an individual, if the gross income derived by him from such trade or business is not more than $1,800, the net earnings from self-employment derived by him from such trade or business may, at his option, be deemed to be 66% percent of such ^ross income; or "(ii) m the case of an individual, if the gross income derived by him from such trade or business is more than $1,800 and the net earnings from self-employment derived by him from such trade or business (computed under this subsection without regard to this sentence) are less than $1,200, the net earnings from selfemployment derived by him from such trade or business may, at his option, be deemed to be $1,200; and "(iii) in the case of a member of a partnership, if his distributive share of the gross income of the partnership derived from such trade or business (after such gross income has been reduced Y)y the sum of all payments to which section 707^ (c) applies) is not more than $1,800, his distributive share of income described ijj section 702(a)(9) derived from such trade or business may, at his option, be deemed to be an amount equal to 66% percent of his distributive share of such gross income (after such gross income has been so reduced); or "(iv) in the case of a member of a partnership, if his distributive share of the gross income of the partnership derived from such trade or business (after such gross income has been reduced ]jy ^j^g gyjjj Qf oil payments to which section 707(c) applies) is more than $1,800 and his distributive share (whether or not distributed) of income described in section 702(a)(9) derived from such trade or business (computed under this subsection without regard to this sentence) is less than $1,200, his distributive share of income described in section 702(a)(9) derived from such trade or business may, at his option, be deemed to be $1,200. For purposes of the preceding sentence, gross income means— "(v) in the case of any such trade or business in which the income is computed under a cash receipts and disbursements method, the gross receipts from such trade or business reduced by the cost or other basis of property which was purchased and sold in carrying on such trade or business, adjusted (after such reduction) in accordance with the provisions of paragraphs (1) through (7) of this subsection; and "(vi) in the case of any such trade or business in which the income is computed under an accrual method, the gross income from such trade or business, adjusted in accordance with the provisions of paragraphs (1) through (7) of this subsection; and, for purposes of such sentence, if an individual (including a member of a partnership) derives gross income from more than one such trade or business, such gross income (including his distributive share of the gross income of any partnership derived from any such trade or business) shall be deemed to have been derived from one trade or business."

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