Final rules 1
(a) Denial of farm loss
Amended 1988, 2017
- 2017 Pub. L. 115-97 Pub. L. 115–97 redesignated par. (4) as (3) and struck out former par. (3). Prior to amendment, text of par. (3) read as follows: “For purposes of paragraph (1), a personal service corporation (within the meaning of section 469(j)(2)) shall be treated as a taxpayer other than a corporation.”
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 1007(d)(3), added par. (4).
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(1) In general For purposes of computing the amount of the alternative minimum taxable income for any taxable year of a taxpayer other than a corporation—
(A) Disallowance of farm loss No loss of the taxpayer for such taxable year from any tax shelter farm activity shall be allowed.
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(B) Deduction in succeeding taxable year Any loss from a tax shelter farm activity disallowed under subparagraph (A) shall be treated as a deduction allocable to such activity in the 1st succeeding taxable year.
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(2) Tax shelter farm activity For purposes of this subsection, the term “tax shelter farm activity” means—
Amended 1988
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 1007(d)(1), struck out “(as modified by section 461(i)(4)(A))” after “section 464(c)” in subpar. (A) and substituted “section 469(c)” for “section 469(d), without regard to paragraph (1)(B) thereof” in subpar. (B).
(A) any farming syndicate as defined in section 461(k), and
Amended 2014, 2018
- 2018 Pub. L. 115-141 Pub. L. 115–141 substituted “461(k)” for “461(j)”.
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 221(a)(58)(E), substituted “section 461(j)” for “section 464(c)”.
(B) any other activity consisting of farming which is a passive activity (within the meaning of section 469(c)).
(3) Determination of loss In determining the amount of the loss from any tax shelter farm activity, the adjustments of sections 56 and 57 shall apply.
Amended 1988, 2017
- 2017 Pub. L. 115-97 Pub. L. 115–97 redesignated par. (4) as (3) and struck out former par. (3). Prior to amendment, text of par. (3) read as follows: “For purposes of paragraph (1), a personal service corporation (within the meaning of section 469(j)(2)) shall be treated as a taxpayer other than a corporation.”
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 1007(d)(2), substituted “469(j)(2)” for “469(g)(1)(C)”.
(b) Disallowance of passive activity loss In computing the alternative minimum taxable income of the taxpayer for any taxable year, section 469 shall apply, except that in applying section 469—
Amended 1987, 1988, 2014
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 221(a)(60)(B), inserted “and” at end of par. (1), redesignated par. (3) as (2) and struck out former par. (2) which read as follows: “the provisions of section 469(m) (relating to phase-in of disallowance) shall not apply, and”.
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 1007(d)(4), added pars. (1) to (3) and struck out former pars. (1) to (3) which read as follows:
- 1988 “(1) the adjustments of section 56 shall apply,
- 1988 “(2) any deduction to the extent such deduction is an item of tax preference under section 57(a) shall not be taken into account, and
- 1988 “(3) the provisions of section 469(m) (relating to phase-in of disallowance) shall not apply.”
- 1987 Pub. L. 100-203 Pub. L. 100–203 substituted “section 469(m)” for “section 469(l)”.
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(1) the adjustments of sections 56 and 57 shall apply, and
(2) in lieu of applying section 469(j)(7), the passive activity loss of a taxpayer shall be computed without regard to qualified housing interest (as defined in section 56(e)).
(c) Special rules For purposes of this section—
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(1) Special rule for insolvent taxpayers
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(A) In general The amount of losses to which subsection (a) or (b) applies shall be reduced by the amount (if any) by which the taxpayer is insolvent as of the close of the taxable year.
(B) Insolvent For purposes of this paragraph, the term “insolvent” means the excess of liabilities over the fair market value of assets.
(2) Loss allowed for year of disposition of farm shelter activity If the taxpayer disposes of his entire interest in any tax shelter farm activity during any taxable year, the amount of the loss attributable to such activity (determined after carryovers under subsection (a)(1)(B)) shall (to the extent otherwise allowable) be allowed for such taxable year in computing alternative minimum taxable income and not treated as a loss from a tax shelter farm activity.