Farmer Retirement Security Act

Farmer Retirement Security Act - Amends the Internal Revenue Code to exclude from gross income gain from the sale or exchange of qualified farm property to the extent that the proceeds are paid into an individual retirement account. Establishes limitations on such rollover amounts per individual and per family. Denies an itemized deduction for such rollover amounts and exempts such amounts from limitations on contributions to individual retirement accounts.

 
HR 2333 IH
102d CONGRESS
1st Session
 H. R. 2333
To amend the Internal Revenue Code of 1986 to permit farmers to rollover
into an individual retirement account the proceeds from the sale of a farm.
IN THE HOUSE OF REPRESENTATIVES
May 14, 1991
Mr. MOODY introduced the following bill; which was referred to the Committee
on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to permit farmers to rollover
into an individual retirement account the proceeds from the sale of a farm.
  Be it enacted by the Senate and House of Representatives of the United
  States of America in Congress assembled,
SECTION 1. SHORT TITLE.
  This Act may be cited as the `Farmer Retirement Security Act'.
SEC. 2. ROLLOVER OF PROCEEDS FROM SALE OF FARM INTO INDIVIDUAL RETIREMENT
ACCOUNT.
  (a) IN GENERAL- Subpart A of part 1 of subchapter D of chapter 1 is of
  the Internal Revenue Code of 1986 (relating to pension, profit-sharing,
  stock bonus plans, etc.) is amended by inserting after section 408 the
  following new section:
`SEC. 408A. ROLLOVER TREATMENT FOR PROCEEDS FROM SALE OF FARM.
  `(a) IN GENERAL- In the case of an individual, gross income does not include
  gain from the sale or exchange of qualified farm property to the extent of
  the amounts which the individual, not later than the 60th day after the
  date of the sale or exchange, pays into an individual retirement account
  (within the meaning of section 408(a)) for the benefit of the individual
  (or spouse of the individual).
  `(b) QUALIFIED FARM PROPERTY- For purposes of this section--
  `(1) IN GENERAL- The term `qualified farm property' means real or personal
  property located in the United States if, during the 5-year period ending
  on the date of the sale or exchange of the property--
  `(A) the property was used for farming purposes, and
  `(B) there was material participation by the individual (or spouse of the
  individual) in the operation of the farm.
  `(2) FARM- The terms `farm' and `farming purposes' have the respective
  meanings given such terms by paragraphs (4) and (5) of section 2032A(e).
  `(3) APPLICABLE RULES- Rules similar to the rules of paragraphs (3) and
  (6) of section 2032A(e) shall apply.
  `(c) LIMITATIONS-
  `(1) MAXIMUM ROLLOVER PER INDIVIDUAL- The amount which may be excluded
  from gross income under subsection (a) in any taxable year on account of
  payments into an individual retirement account for the benefit of any 1
  individual shall not exceed--
  `(A) the amount determined by multiplying--
  `(i) the sum of the dollar limitations applicable for such taxable year
  under sections 402(g)(1) and 408(a)(1), by
  `(ii) the holding period of the individual with respect to the property,
  reduced by
  `(B) the aggregate amount excluded under subsection (a) with respect to
  the individual for all preceding taxable years.
  `(2) MAXIMUM ROLLOVER PER FAMILY- The aggregate amount which may be excluded
  from gross income under subsection (a) in any taxable year by any individual
  (and spouse of the individual) shall not exceed--
  `(A) $500,000, reduced by
  `(B) the sum of--
  `(i) the amount by which the aggregate value of the assets held by the
  individual (and spouse) in individual retirement plans exceeds $100,000, and
  `(ii) the aggregate amount excluded under subsection (a) by the individual
  (and spouse) for all preceding taxable years.
  `(d) TREATMENT OF INVESTMENT- For purposes of section 72, any amount
  excluded from gross income under subsection (a) on account of a payment
  into an individual retirement account shall be treated as an amount allowed
  as a deduction under section 219 with respect to the individual retirement
  account.'
  (b) DENIAL OF DEDUCTION FOR ROLLOVER AMOUNT- Paragraph (2) of section 219(d)
  of such Code (relating to denial of deduction for recontributed amounts)
  is amended by striking `or 408(d)(3)' and inserting `408(d)(3), or 408A'.
  (c) EXEMPTION FROM CONTRIBUTION LIMITATIONS-
  (1) Paragraph (1) of section 408(a) of such Code (relating to limitation
  on contributions to individual retirement accounts) is amended by striking
  `or 403(b)(8)' and inserting `403(b)(8), or 408A'.
  (2) Subparagraph (A) of section 4973(b)(1) of such Code (relating to tax
  on excess contributions to individual retirement accounts) is amended by
  striking `or 408(d)(3)' and inserting `408(d)(3), or 408A'.
  (d) EFFECTIVE DATE- The amendments made by this section shall apply to
  sales or exchanges after the date of the enactment of this Act.