Koramba Farmers & Graziers No. 1, Dean Phillips, Tax Matters Partner, et al. - Page 10

                                       - 10 -                                         

          availability of conservation expenditure deductions to amounts              
          incurred that are consistent with a conservation plan approved by           
          the Soil Conservation Service (SCS) of the Department of                    
          Agriculture, and if there is no SCS conservation plan for the               
          area in which the property is located, amounts incurred for                 
          improvements that are consistent with a plan of a State                     
          conservation agency.  S. Rept. 99-313, supra, 1986-3 C.B. (Vol.             
          3) at 265.                                                                  
               Respondent argues that the consequence of the form in which            
          Congress chose to cast section 175(c)(3)(A) requires the                    
          disallowance of deductions for conservation expenditures outside            
          the United States.  The partnerships, of course, dispute this.              
               The partnerships agree with respondent that their                      
          conservation expenditures obviously cannot qualify under section            
          175(c)(3)(A)(i) because in that provision it is expressly                   
          provided that the conservation expenditures must be consistent              
          with an SCS-approved plan for the area in which the land is                 
          located.  The Department of Agriculture through the SCS would be            
          unlikely, to say the least, to deal with land located outside the           
          United States.  The partnerships argue that their conservation              
          expenditures can, however, qualify under section                            
          175(c)(3)(A)(ii).                                                           
               They first maintain that the term "State", as used in clause           
          (ii), should be read expansively so as to embrace governmental              





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  Next

Last modified: May 25, 2011