Page:United States Statutes at Large Volume 90 Part 2.djvu/70

 90 STAT. 1538

PUBLIC LAW 94-455—OCT. 4, 1976 was n o change of membership throughout its taxable year beginning i n 1976, the amendments made by this subsection shall apply to taxable years beginning after December 31, 1976. (b) ORCHARD AND VINEYARD E X P E N S E S. —

26 USC 278.

(1) IN GENERAL.—Section 278 (relating to capital expenditures incurred in p l a n t i n g and developing citrus and almond groves) is amended by striking out subsection (b) and by inserting in lieu thereof the following: " (b) F A R M I N G SYNDICATES.—Except as provided in subsection (c),

in the case of any farming syndicate (as defined in section 464(c)) engaged in planting, cultivating, maintaining, or developing a grove, orchard, or vineyard i n which fruit o r n u t s a r e grown, any amount— " (1) which would be allowable as a deduction b u t for the provisions of this subsection, " (2) which is attributable to the planting, cultivation, maintenance, or development of such grove, orchard, or vineyard, and " (3) which is incurred in a taxable year before the first taxable year in which such grove, orchard, or vineyard bears a crop or yield in commercial quantities, shall be charged to capital account. " (c) EXCEPTIONS,—Subsections (a) and (b) shall not apply to amounts allowable as deductions (without regard to this section) attributable to a grove, orchard, o r vineyard which was replanted after h a v i n g been lost or damaged (while in the hands of the tax p a y e r) by reason of freezing temperatures, disease, drought, pests, or casualty." (2) CONFORMING AMENDMENTS.—

(A) The heading of section 278 is amended to read a s follows:

"SEC. 278. CAPITAL EXPENDITURES INCURRED IN PLANTING AND DEVELOPING CITRUS AND ALMOND GROVES; CERTAIN CAPITAL EXPENDITURES OF FARMING SYNDICATES.".

26 USC 278 note.

(B) Subsection (a) of section 278 (relating to general rule) is amended by striking out "subsection (b) " and inserting i n lieu thereof "subsection (c) ". (3) EFFECTIVE DATE.—The amendments made by this subsection shall apply to taxable years beginning after December 31, 1975. The amendments made by this subsection shall not apply in the case of a grove, orchard, or vineyard referred to i n the amendment made by subsection (b)(1) which was planted or replanted on or before December 31, 1975. For purposes of the preceding sentence, a tree or vine which, on or before December 31, 1975, was planted a t a place other than the grove, orchard, or vineyard of the tax p a y e r b u t which, on such date, was owned by the tax p a y e r (or with respect to which the taxpayer had a bindi n g contract to purchase) shall be treated as planted on December 31, 1975, in the grove, orchard, or vineyard of the taxpayer. (c) METHOD OF ACCOUNTING FARMING.— (1) GENERAL RULE.—

26 USC 447.

FOR CORPORATIONS

ENGAGED I N

(A) Subpart A of part II of subchapter E of chapter 1 (relating to methods of accounting) is amended by a d d i n g a t the end thereof the following new section: "SEC. 447. METHOD OF ACCOUNTING FOR CORPORATIONS ENGAGED IN FARMING. "(a)

GENERAL RULE. — E x c e p t as otherwise provided by law, the

taxable income from f a r m i n g pf—

�