SEC. 2141. LIVESTOCK SOLD ON ACCOUNT OF DROUGHT.

(a) IN GENERAL.-Section 451 (relating to general rules for taxable 26 USC 451. year of inclusion) is amended by adding at the end thereof the following new subsection:

"(e) SPECIAL RULE FOR PROCEEDS FROM LIVESTOCK SOLD ON ACCOUNT OF DROUGHT.

"(1) IN GENERAL.-In the case of income derived from the sale or exchange of livestock (other than livestock described in section 1231(b) (3)) in excess of the number the taxpayer would sell if he followed his usual business practices, a taxpayer reporting on the cash receipts and disbursements method of accounting may elect to include such income for the taxable year following the taxable year in which such sale or exchange occurs if he establishes that, under his usual business practices, the sale or exchange would not have occurred in the taxable year in which it occurred if it were not for drought conditions, and that these drought conditions had resulted in the area being designated as eligible for assistance by the Federal Government.

"(2) LIMITATION.-Paragraph (1) shall apply only to a taxpayer whose principal trade or business is farming (within the meaning of section 6420 (c) (3)).”

(b) EFFECTIVE DATE.-The amendment made by this section applies 26 USC 451 to taxable years beginning after December 31, 1975.

Approved October 4, 1976.

note.

LEGISLATIVE HISTORY:

HOUSE REPORTS: No. 94-658 (Comm. on Ways and Means) and No. 94-1515 (Comm. of
Conference).

SENATE REPORTS: No. 94-938 and No. 94-938, Pt. 2 (Comm. on Finance) and No.
94-1236 (Comm. of Conference).

CONGRESSIONAL RECORD:

Vol. 121 (1975): Dec. 3, 4, considered and passed House.

Vol. 122 (1976): June 16-18, 21-25, 28-30, July 1, 20-23, 26-30, Aug. 3-6,
considered and passed Senate, amended.

Sept. 16, House and Senate agreed to conference report, resolved
amendments in disagreement.

WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS:

Vol. 12, No. 41 (1976): Oct. 4, Presidential statement.

Note.-A change has been made in the slip law format to provide for one-time preparation of copy to be used for publication of both slip laws and the United States Statutes at Large volumes. Comments from users are invited by the Office of the Federal Register, National Archives and Records Service, Washington, D.C. 20408.

Tax Reform Act of 1976
as of December 31, 1976

Section 301 (g) (2) of the Tax Reform Act of 1976 has been amended by Public Law 94-568 (1976-2 C.B. 596) to read as follows:

"(2) Tax Carryover.

"(A) IN GENERAL.-Except as provided in subparagraph (B), the amount of any tax carryover under section 56 (c) of the Internal Revenue Code of 1954 from a taxable year beginning before January 1, 1976, shall not be allowed as a tax carryover for any taxable year beginning after December 31, 1975.

"(B) Except as provided by paragraph (4) and in section 56(e) of the Internal Revenue Code of 1954, in the case of a corporation which is not an electing small business corporation (as defined in section 1371(b) of such Code) or a personal holding company (as defined in section 524 of such Code), the amount of any tax carryover under section 56 (c) of such code from a taxable year beginning before July 1, 1976, shall not be allowed as a tax carryover for any taxable year beginning after June 30, 1976".

Sections 1204 (d), 1205(c), and 1209(e) of the Tax Reform Act of 1976 have been amended by Public Law 94-528 (1976-2 C.B. 553) by striking out "December 31, 1976" and inserting in lieu thereof "February 28, 1977."

SUMMARY

OF THE

TAX REFORM ACT OF 1976

(H.R. 10612, 94TH CONGRESS, PUBLIC LAW 94-455)

For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. 20402 - Price $1.55

LETTER OF TRANSMITTAL

OCTOBER 4, 1976.

Hon. RUSSELL B. LONG, Chairman,
Hon. AL ULLMAN, Vice Chairman,
Joint Committee on Taxation,
U.S. Congress, Washington, D.C.

DEAR MESSRS. CHAIRMEN: Immediately following the passage of the conference report by the House and the Senate on the Tax Reform Act of 1976 (H.R. 10612), the House and Senate also passed a House Concurrent Resolution (H. Con. Res. 751), rearranging the section numbers of the bill in a more logical sequence. In addition, the House Concurrent Resolution made corrections of printing, clerical, and technical errors.

Primarily because of the rearrangement of the section numbers, the Public Law (P.L. 94-455), or slip law on the bill, shows many provisions in a different sequence than in the conference report and in the accompanying joint explanatory statement of the committee of conference. The staff believed that this would make it difficult to use the joint statement of the conferees in examining the provisions of the public law. For that reason; it has prepared this summary which has the sections rearranged in the order in which they appear in the public law. This summary also takes into account the other changes made in the House Concurrent Resolution and corrects printing and other errors which occurred in the joint statement of the conferees.

The Joint Committee staff has customarily prepared general explanations of the larger tax acts. This summary is not intended to replace such a document. It is anticipated that the general explanation will be issued later this year.

Sincerely yours,

LAURENCE N. WOODWORTH,
Chief of Staff.

(III)