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beginning with the taxable year in which the trees were
planted. For purposes of the preceding sentence, the
portion of a citrus or almond grove planted in 1
taxable year shall be treated separately from the
portion of such grove planted in another taxable year.
Respondent contends that the 4-year limit on the ability of
citrus farmers to elect out of section 263A reflects a statutory
inference and congressional recognition that citrus farmers were
subject to section 263A.8
Petitioner argues that section 263A(d)(3)(C) simply provides
that the subsection (d)(3) election out of section 263A is not
generally available to citrus farmers. Petitioner contends that
section 263A(d)(1) defines which farmers are subject to section
263A, whereas section 263A(d)(3) allows certain farmers to elect
not to be subject to 263A. In other words, petitioner contends
that section 263A(d)(1) should be read separately from section
263A(d)(3). Finally, petitioner contends that respondent’s
comparison of section 263A(d)(3)(C) to repealed section 278,
creates, rather than solves, any ambiguity in section 263A.
We agree with respondent that the inclusion of section
263A(d)(3)(C), as part of section 263A(d), is an indication that
Congress intended or expected that the section 263A
capitalization rules would apply to citrus farmers (i.e., citrus
8 Respondent also surmises that by setting a 4-year
threshold on election out of sec. 263A, Congress was aware that
the nationwide weighted average preproductive period for citrus
trees would exceed 2 years.
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