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farmers would not meet the “2 years or less” standard). In
general, it would be incongruous to include section
263A(d)(3)(C), if it was expected or intended that citrus farmers
would meet the “2 years or less” standard.
Former section 278 provided that expenses, incurred before
the close of the fourth year, for planting, cultivation,
maintenance, or development of citrus groves, were to be “charged
to [the] capital account.” Sec. 278(a).9 Section 278 was
repealed in connection with the enactment of section 263A in the
Tax Reform Act of 1986, Pub. L. 99-514, sec. 803(b)(6), 100 Stat.
2350. The 4-year limitation on electing out of section 263A
comports with a similar 4-year requirement that such expenses
were to be charged to the capital account under section 278.
Accordingly, for citrus farmers, the requirement that expenses be
capitalized, at least for the first 4 years, did not change by
repeal of section 278 and the enactment of section 263A. We are
not in a position to say, however, that the 4-year limit in
either statute indicates recognition by Congress that the
preproductive period for citrus trees was or is 4 years.10
9 Sec. 278 was added in 1969 as part of the Tax Reform Act
of 1969, Pub. L. 91-172, sec. 216(a), 83 Stat. 615.
10 In the General Explanation of the Tax Reform Act of 1969,
the staff of the Joint Committee on Taxation (J. Comm. Print
1970), explained the reason for enacting the now repealed sec.
278 was to address a situation where certain high-income
taxpayers were taking advantage of the benefit of ordinary
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