- 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 the
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011