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concluded that, industrywide, citrus plants begin their
productive life at about 30 to 36 months old. Respondent’s other
experts concluded that, generally, citrus is ready for harvest in
the third year. The experts did not preclude the possibility
that production could occur earlier. Accordingly, petitioner’s
and respondent’s experts are relatively close in their views.
Their opinions permit the conclusion that citrus trees can
produce a small amount of fruit within 2 years, but they vary
regarding whether that production is commercially viable within
the second year. None of the parties’ experts was able to
provide empirical or statistical evidence of a “nationwide
weighted average preproductive period” for citrus plants.
We can deduce from the election-out provisions applicable
exclusively to citrus farmers, that it was expected that citrus
tree farmers would not meet the section 263A(d)(1)(A)(ii) 2-year
test for being excepted from the section 263A capitalization
requirements. To conclude that citrus trees would meet the 2-
year test would render section 263A(d)(3)(C) superfluous. In
addition, the 4-year limitation on electing-out of section 263A
requirements comports with the similar 4-year capitalization
requirement in repealed section 278 that, to some extent, section
263A replaced. This supports our holding that Pelaez and Sons,
Inc., is subject to the capitalization requirements of section
263A.
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