Page:United States Statutes at Large Volume 94 Part 2.djvu/712

 94 STAT. 1990

PUBLIC LAW 96-451—OCT. 14, 1980 "(1) QUALIFIED TIMBER PROPERTY.—The term 'qualified timber property' means a woodlot or other site located in the United States which will contain trees in significant commercial quantities and which is held by the taxpayer for the planting, cultivating, caring for, and cutting of trees for sale or use in the commercial production of timber products. "(2) AMORTIZABLE BASIS.—The term 'amortizable basis' means that portion of the basis of the qualified timber property attributable to reforestation expenditures. "(3) REFORESTATION EXPENDITURES.—

"(A) IN GENERAL.—The term 'reforestation expenditures' means direct costs incurred in connection with forestation or reforestation by planting or artificial or natural seeding, including costs— "(i) for the preparation of the site; "(ii) of seeds or seedlings; and "(iii) for labor and tools, including depreciation of equipment such as tractors, trucks, tree planters, and similar machines used in planting or seeding. "(B) COST-SHARING

PROGRAMS.—Reforestation

expendi-

tures shall not include any expenditures for which the taxpayer has been reimbursed under any governmental reforestation cost-sharing program unless the amounts reimbursed have been included in the gross income of the taxpayer. "(4) BASIS ALLOCATION.—If the amount of the amortizable basis

26 USC 62.

acquired during the taxable year of all qualified timber property with respect to which the taxpayer has made an election under subsection (a) exceeds the amount of the limitation under subsection (b)(1), the taxpayer shall allocate that portion of such amortizable basis with respect to which a deduction is allowable under subsection (a) to each such qualified timber property in such manner as the Secretary may by regulations prescribe. "(d) LIFE TENANT AND REMAINDERMAN.—In the case of property held by one person for life with remainder to another person, the deduction under this section shall be computed as if the life tenant were the absolute owner of the property and shall be allowed to the life tenant.". (b) ADJUSTED GROSS INCOME.—Section 62 of such Code (relating to definition of adjusted gross income) is amended by inserting after paragraph (14) the following: "(15) REFORESTATION EXPENSES.—The deduction allowed by

Ante, p 1989.

section 194.". (c) CONFORMING AMENDMENTS.—

26 USC 1245.

(1)(A) Paragraph (2) of section 1245(a) of such Code (relating to gain from dispositions of certain depreciable property) is amended by striking out "190, 193" each place it appears and inserting in lieu thereof "190,193,194". (B) Paragraphs (2) and (3)(D) of such section 1245(a) are each amended by striking out "or 193" and inserting "193, or 194". (C) Section 1245(b) of such Code (relating to exceptions and limitations) is amended by adding at the end thereof the following new paragraph: (8) TIMBER PROPERTY.—In determining, under subsection (a)(2), the recomputed basis of property with respect to which a deduction under section 194 was allowed for any taxable year, the taxpayer shall not take into account adjustments under section 194 to the extent such adjustments are attributable to the

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