Tax Fairness for Farmers, Ranchers, and Small Businessmen Act of 1987

Tax Fairness for Farmers, Ranchers, and Small Businessmen Act of 1987 - Amends the Tax Reform Act of 1986 to repeal provisions which eliminated the use of income averaging. Specifies that the Internal Revenue Code shall be applied and administered as if such provisions had not been enacted.

Increases the amount of the income tax deduction for health insurance premiums paid by self-employed individuals from 25 percent of such costs to 50 percent of such costs.

Repeals requirements that farmers must capitalize preproductive costs.

Denies the use of cash accounting for all corporations engaged in farm product processing with annual gross receipts in excess of $100,000,000.

Allows farmers the full investment tax credit carry forward. (Present law requires a 35 percent reduction in the carry forward of such credit.)

Allows a one-time exclusion of any gain realized from the sale or exchange of land used in the trade or business of farming.