PUBLIC LAW 94-455—OCT. 4, 1976
90 STAT. 1537
agement of any trade or business of farming, any interest in a partnership or other enterprise which is attributable to such active participation, " (B) in the case of any individual whose principal residence is on a farm, any partnership or other enterprise engaged in the trade or business of farming such farm, " (C) in the case of any individual who is actively particip a t i n g in the management of any trade or business of farming or who is an individual who is described in subparagraph (A) or (B), any participation in the further processing of > livestock which was raised in such trade or business (or in the trade or business referred to in subparagraph (A) or (B)), " (D) in the case of an individual whose principal business activity involves active participation in the management of a trade or business of farming, any interest in any other trade or business of farming, and", " (E) any interest held by a member of the family (within the meaning of section 2 6 7 (c)(4)) of a g r and p a r e n t of an 26 USC 267. individual described in subparagraph (A), (B), (C), or (D) if the interest in the partnership or the enterprise is attributable to the active participation of the individual described in subparagraph (A), (B), (C), o r (D). For purposes of subparagraph (A), where one farm is substituted for or added to another farm, both farms shall be treated as one farm. " (d) EXCEPTIONS.—Subsection (a) shall not apply to— " (1) any amount paid for supplies which are on h and a t the close of the taxable year on account of fire, storm, flood, or other casualty or on account of disease or drought, or " (2) any amount required to be charged to capital account under section 278. " (e) DEFINITIONS. — For purposes of this section— " (1) F A R M I N G. — The term 'farming' means the cultivation of land or the raising or harvesting of any agricultural or horticultural commodity including the raising, shearing, feeding, caring for, training, and management of animals. For purposes of the preceding sentence, trees (other than trees bearing fruit or nuts) shall not be treated as an agricultural or horticultural commodity. " (2) LIMITED ENTREPRENEUR.—The term ' l i m i t e d entrepreneur' means a person who— " (A) has an interest in an enterprise other than as a limited partner, and " (B) does not actively participate in the management of such enterprise." (2) CLERICAL AMENDMENT.—The table of sections for such subpart C is amended by inserting after the item relating to section 463 the following new item: "Sec. 464. Limitations on deductions in case of farming syndicates." (3) EFFECTIVE DATES.—
(A) IN GENERAL.—Except as provided in subparagraph (B), the amendments made by this subsection shall apply to taxable years beginning after December 31, 1975. (B) TRANSITIONAL RULE. — I n the case of a f a r m i n g syndi-
cate in existence on December 31, 1975, and for which there
26 USC 464
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