- 9 - been made by the partnerships, postcalendar 1986 conservation expenditures in a foreign country, in this instance Australia, do not qualify under section 175 by reason of section 175(c)(3)(A). As stated previously, section 175(c)(3)(A) was added by the Tax Reform Act of 1986, Pub. L. 99-514, sec. 401(a), 100 Stat. 2221, effective for amounts paid or incurred after December 31, 1986, in taxable years ending after that date. Consequently, since the June 30, 1987, taxable year of Koramba No. 1 ended after December 31, 1986, only the last 6 months of its conservation expenses for that year are subject to section 175(c)(3)(A). With the enactment of section 175(c)(3)(A), section 175 is for the first time arguably site-specific (the partnerships challenge site-specificity as to section 175(c)(3)(A)(ii)). The Congressional objective in enacting the 1986 amendment is cogently articulated in the Senate report: The committee is concerned that certain Federal income tax provisions may be affecting prudent farming decisions adversely under present law. In particular, the committee is concerned that such provisions may have contributed to an increase in acreage under production, which in turn may have encouraged the present-day overproduction of agricultural commodities. * * * [S. Rept. 99-313, 1986-3 C.B. (Vol. 3) 265.] Thus, the focus of the amendment is to discourage overproduction of agricultural commodities by keying thePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
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