A bill to amend the Internal Revenue Code of 1986 to restore income averaging for farmers, to restore the investment tax credit and accelerated cost recovery for property used in the trade or business of farming, and for other purposes.

Repeals specified provisions of the Tax Reform Act of 1986 that eliminated income averaging.

Amends the Internal Revenue Code to permit income averaging for a person: (1) actively engaged in the trade or business of farming, including aquaculture; and (2) whose average annual gross income for the three preceding taxable years is at least 50 percent attributable to farming.

Allows an investment tax credit in connection with property used in the trade or business of farming. Creates special rules to allow qualified farm property to be depreciated according to the accelerated cost recovery system in effect prior to enactment of the Tax Reform Act of 1986.

Reduces the maximum tax rate applied to net capital gains realized from sales of timber: (1) from 28 percent to 20 percent with respect to sales by individuals; and (2) from 34 percent to 28 percent with respect to sales by corporations.