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(B) the relationship between the lessor and lessee is one described in subsection (b) of section 267, except that, for purposes of this subparagraph, the phrase "80 percent or more” shall be substituted for the phrase "more than 50 percent” each place it

appears in such subsection. For purposes of determining the ownership of stock in applying subparagraph (B), the rules of subsection (c) of section 267 shali apply, except that the family of an individual shall include only his spouse, ancestors, and lineal descendants.

(c) REASONABLE CERTAINTY TEST.-In any case in which neither subsection (a) nor subsection (b) applies, the determination as to the amount allowable to a lessee as a deduction for any taxable year for exhaustion, wear and tear, obsolescence, or amortization

(1) in respect of any building erected (or other improvement made) on the leased property, or

(2) in respect of any cost of acquiring the lease, shall be made with reference to the term of the lease (excluding any period for which the lease may subsequently be renewed, extended, or continued pursuant to an option exercisable by the lessee), unless the lease has been renewed, extended, or continued or the facts show with reasonable certainty that the lease will be renewed, extended, or continued. SEC. 179. ADDITIONAL FIRST-YEAR DEPRECIATION ALLOWANCE FOR

SMALL BUSINESS. (a) GENERAL RULE.-In the case of section 179 property, the term "reasonable allowance" as used in section 167 (a) may, at the election of the taxpayer, include an allowance, for the first taxable year for which a deduction is allowable under section 167 to the taxpayer with respect to such property, of 20 percent of the cost of such property.

(b) DOLLAR LIMITATION.-If in any one taxable year the cost of section 179 property with respect to which the taxpayer may elect an allowance under subsection (a) for such taxable year exceeds $10,000, then subsection (a) shall apply with respect to those items selected by the taxpayer, but only to the extent of an aggregate cost of $10,000. In the case of a husband and wife who file a joint return under section 6013 for the taxable year, the limitation under the preceding sentence shall be $20,000 in lieu of $10,000. (c) ELECTION.

(1) IN GENERAL.- The election under this section for any taxable year shall be made within the time prescribed by law (including extensions thereof) for filing the return for such taxable year. The election shall be made in such manner as the Secretary or his delegate may by regulations prescribe.

(2) ELECTION IRREVOCABLE. ---Any election made under this section may not be revoked except with the consent of the Secretary or his delegate. (d) DEFINITIONS AND SPECIAL RULES.

(1) SECTION 179 PROPERTY.-For purposes of this section, the term "section 179 property" means tangible personal property

(A) of a character subject to the allowance for depreciation under section 167,

or

(B) acquired by purchase after December 31, 1957, for use in a trade or business or for holding for production of income, and

(C) with a useful life (determined at the time of such acquisition) of 6 years or more.

(2) PURCHASE DEFINED. -For purposes of paragraph (1), the term "purchase" means any acquisition of property, but only if

(A) the property is not acquired from a person whose relationship to the person acquiring it would result in the disallowance of losses under section 267 or 707 (b) (but, in applying seetion 267 (b) and (c) for purposes of this section, paragraph (4) of section 267 (c) shall be treated as providing that the family of an individual shall include only his spouse, ancestors, and lineal descendants),

(B) the property is not acquired by one member of an affiliated group from another member of the same affiliated group, and

(C) the basis of the property in the hands of the person acquiring it is not determined -

(i) in whole or in part by reference to the adjusted basis of such property in the hands of the person from whom acquired,

(ii) under section 1014 (a) (relating to property aequired from a decedent). (3) Cost.- For purposes of this section, the cost of property does not include so much of the basis of such property as is determined by reference to the basis of other property held at any time by the person acquiring such property.

(4) SECTION NOT TO APPLY TO TRUSTS. - This section shall not apply to trusts.

(5) ESTATES. ---In the case of an estate, any amount apportioned to an heir, legatee, or devisee under section 167 (g) shall not be taken into account in applying subsection (b) of this section to section 179 property of such heir, legatee, or devisee not held by such estate.

(6) DOLLAR LIMITATION OF AFFILIATED GROUP, ---For purposes of subsection (b) of this section

(A) all members of an affiliated group shall be treated as one taxpayer, and

(B) the Secretary or his delegate shall apportion the dollar limitation contained in such subsection (b) among the members of such affiliated group in such manner as he shall by regulations prescribe.

(7) AFFILIATED GROUP DEFINED.-For purposes of paragraphs (2) and (6), the term "affiliated group” has the meaning assigned to it by section 1504, except that, for such purposes, the phrase "more than 50 percent" shall be substituted for the phrase "at least 80 percent” each place it appears in section 1504 (a).

(8) ADJUSTMENT TO BASIS; WHEN MADE. --In applying section 167 (f), the adjustment under section 1016 (a) (2) resulting by reason of an election made under this section with respect to any section 179 property shall be made before any other deduction allowed by section 167 (a) is computed.

(e) REGULATIONS.—The Secretary or his delegate shall prescribe such regulations as may be necessary to carry out the purposes of this section. SEC. 180. EXPENDITURES BY FARMERS FOR FERTILIZER, ETC.

(a) IN GENERAL.-A taxpayer engaged in the business of farming may elect to treat as expenses which are not chargeable to capital account expenditures (otherwise chargeable to capital account) which are paid or incurred by him during the taxable year for the purchase or acquisition of fertilizer, limé, ground limestone, marl, or other materials to enrich, neutralize, or condition land used in farming, or for the application of such materials to such land. The expenditures so treated shall be allowed as a deduction.

(b) LAND USED IN FARMING.-For purposes of subsection (a), the term "land used in farming" means land used (before or simultaneously with the expenditures described in subsection (a)) by the taxpayer or his tenant for the production of crops, fruits, or other agricultural products or for the sustenance of livestock.

(c) ELECTION.-The election under subsection (a) for åny taxable year shall be made within the time prescribed by law (including extensions thereof) for filing the return for such taxable year. Such election shall be made in such manner as the Secretary or his delegate may by regulations prescribe. Such election may not be revoked except with the consent of the Secretary or his delegate. PART VII-ADDITIONAL ITEMIZED DEDUCTIONS FOR

INDIVIDUALS
Sec. 211. Allowance of deductions.
Sec. 212. Expenses for production of income.
Sec. 213. Medical, dental, etc. expenses,
Sec. 214. Expenses for care of certain dependents.
Sec. 215. Alimony, etc., payments.
Sec. 216. Amounts representing taxes and interest paid to co-

operative housing corporation.

Sec. 217. Cross references. SEC. 211. ALLOWANCE OF DEDUCTIONS.

In computing taxable income under section 63 (a), there shall be allowed as deductions the items specified in this part, subject to the exceptions provided in pårt IX (section 261 and following, relating to items not deductible). SEC. 212. EXPENSES FOR PRODUCTION OF INCOME.

In the case of an individual, there shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year

(1) for the production or collection of income;

(2) for the management, conservation, or maintenance of property held for the production of income; or

(3) in connection with the determination, collection, or refund of any tax.

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SEC. 213. MEDICAL, DENTAL, ETC., EXPENSES.

(a) ALLOWANCE OF DEDUCTION.—There shall be allowed as a deduction the following amounts of the expenses paid during the taxable year, not compensated for by insurance or otherwise, for medical care of the taxpayer, his spouse, or a dependent (as defined in section 152):

(1) If neither the taxpayer nor his spouse has attained the age of 65 before the close of the taxable year

(A) the amount of such expenses for the care of any dependent who

(i) is the mother or father of the taxpayer or of his spouse, and

(ii) has attained the age of 65 before the close of the taxable

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year, and

(B) the amount by which such expenses for the care of the taxpayer, his spouse, and such dependents (other than any dependent described in subparagraph (A)) exceed 3 percent of the adjusted gross income.

(2) If either the taxpayer or his spouse has attained the age of 65 before the close of the taxable year

(A) the amount of such expenses for the care of the taxpayer and his spouse,

(B) the amount of such expenses for the care of any dependent described in paragraph (1) (A), and

(C) the amount by which such expenses for the care of such dependents (other than any dependent described in paragraph

(1) (A)) exceed 3 percent of the adjusted gross income. (b) LIMITATION WITH RESPECT TO MEDICINE AND DRUGS.Amounts paid during the taxable year for medicine and drugs which (but for this subsection) would be taken into account in computing the deduction under subsection (a) shall be taken into account only to the extent that the aggregate of such amounts exceeds 1 percent of the adjusted gross income.

(c) MAXIMUM LIMITATIONS.--Except as provided in subsection (g), the deduction under this section shall not exceed $2,500, multiplied by the number of exemptions allowed for the taxable year as a deduction under section 151 (other than exemptions allowed by reason of subsection (c) or (d), relating to additional exemptions for age or blindness); except that the maximum deduction under this section shall be

(1) $5,000, if the taxpayer is single and not the head of a household' (as defined in section 1 (b) (2)) and not a surviving spouse (as defined in section 2 (b)) or is married but files a separate return;

(2) $10,000, if the taxpayer files a joint return with his spouse under section 6013, or is the head of a household (as defined in section 1 (b) (2)) or a surviving spouse (as defined in section 2 (b)). (d) SPECIAL RULE FOR DECEDENTS.

(1) TREATMENT OF EXPENSES PAID AFTER DEATH.–For purposes of subsection (a), expenses for the medical care of the taxpayer which are paid out of his estate during the 1-year period beginning with the day after the date of his death shall be treated as paid by the taxpayer at the time incurred.

or

(2) LIMITATION.-Paragraph (1) shall not apply if the amount paid is allowable under section 2053 as a deduction in computing the taxable estate of the decedent, but this paragraph shall not apply if (within the time and in the manner and form prescribed by the Secretary or his delegate) there is filed

(A) a statement that such amount has not been allowed as a deduction under section 2053, and

(B) a waiver of the right to have such amount allowed at any time as a deduction under section 2053. (e) DEFINITIONS.-For purposes of this section(1) The term “medical care” means amounts paid

(A) for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body (including amounts paid for accident or health insurance), or

(B) for transportation primarily for and essential to medical care referred to in subparagraph (A).

(2) The determination of whether an individual is married at any time during the taxable year shall be made in accordance with the provisions of section 6013 (d) (relating to determination of status as husband and wife).

(f) EXCLUSION OF AMOUNTS ALLOWED FOR CARE OF CERTAIN DEPENDENTS.-Any expense allowed as a deduction under section 214 shall not be treated as an expense paid for medical care.

(g) MAXIMUM LIMITATION IF TAXPAYER OR SPOUSE HAS ATTAINED AGE 65 AND IS DISABLED.

(1) SPECIAL RULE.-Subject to the provisions of paragraph (2), the deduction under this section shall not exceed

(A) $15,000, if the taxpayer has attained the age of 65 before the close of the taxable year and is disabled, or if his spouse has attained the age of 65 before the close of the taxable year and is disabled and if his spouse does not make a separate return for the taxable year, or

(B) $30,000, if both the taxpayer and his spouse have attained the age of 65 before the close of the taxable year and are disabled and if the taxpayer files a joint return with his spouse under section 6013.

(2) AMOUNTS TAKEN INTO ACCOUNT.--For purposes of paragraph (1)—

(A) amounts paid by the taxpayer during the taxable year for medical care, other than amounts paid for

(i) his medical care, if he has attained the age of 65 before the close of the taxable year and is disabled, or

(ii) the medical care of his spouse, if his spouse has attained the age of 65 before the close of the taxable year and is disabled, shall be taken into account only to the extent that such amounts do not exceed the maximum limitation provided in subsection (c) which would (but for the provisions of this subsection) apply to the taxpayer for the taxable year;

(B) if the taxpayer has attained the age of 65 before the close of the taxable year and is disabled, amounts paid by him during the taxable year for his medical care shall be taken into account only to the extent that such amounts do not exceed $15,000; and

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