I

103D CONGRESS

2D SESSION H. R. 5109

To amend the Internal Revenue Code of 1986 to provide that a taxpayer

may elect to include in income crop insurance proceeds and disaster

payments in the year of the disaster or in the following year, and

for other purposes.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 27, 1994

Mr. MINGE 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 provide

that a taxpayer may elect to include in income crop

insurance proceeds and disaster payments in the year

of the disaster or in the following year, and for other

purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SPECIAL RULE FOR CROP INSURANCE PRO4 CEEDS AND DISASTER PAYMENTS.

5 (a) IN GENERAL.—Section 451(d) of the Internal

6 Revenue Code of 1986 (relating to special rule for crop
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1 insurance proceeds and disaster payments) is amended to

2 read as follows:

3 ‘‘(d) SPECIAL RULE FOR CROP INSURANCE PRO4 CEEDS AND DISASTER PAYMENTS.—

5 ‘‘(1) GENERAL RULE.—In the case of any pay6 ment described in paragraph (2), a taxpayer report7 ing on the cash receipts and disbursements method

8 of accounting—

9 ‘‘(A) may elect to treat any such payment

10 received in the taxable year of destruction or

11 damage of crops as having been received in the

12 following taxable year if the taxpayer estab13 lishes that, under the taxpayer’s practice, in14 come from such crops involved would have been

15 reported in a following taxable year, or

16 ‘‘(B) may elect to treat any such payment

17 received in a taxable year following the taxable

18 year of the destruction or damage of crops as

19 having been received in the taxable year of de20 struction or damage, if the taxpayer establishes

21 that, under the taxpayer’s practice, income

22 from such crops involved would have been re23 ported in the taxable year of destruction or

24 damage.
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1 ‘‘(2) PAYMENTS DESCRIBED.—For purposes of

2 this subsection, a payment is described in this para3 graph if such payment—

4 ‘‘(A) is insurance proceeds received on ac5 count of destruction or damage to crops, or

6 ‘‘(B) is disaster assistance received under

7 any Federal law as a result of—

8 ‘‘(i) destruction or damage to crops

9 caused by drought, flood, or other natural

10 disaster, or

11 ‘‘(ii) inability to plant crops because

12 of such a disaster.’’.

13 (b) EFFECTIVE DATE.—The amendment made by

14 subsection (a) applies to payments received after Decem15 ber 31, 1992, as a result of destruction or damage occur16 ring after such date.

17 SEC. 2. MODIFICATION OF EXCEPTION FROM ACCRUAL

18 METHOD OF ACCOUNTING FOR FAMILY COR19 PORATIONS.

20 (a) IN GENERAL.—Clause (ii) of section

21 447(d)(2)(A) of the Internal Revenue Code of 1986 (relat22 ing to special rules for family corporations) is amended

23 to read as follows:

24 ‘‘(ii) by substituting for

25 ‘$1,000,000’—
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1 ‘‘(I) ‘$25,000,000’ in the case of

2 prior taxable years beginning after

3 December 31, 1985, and before Janu4 ary 1, 1994, and

5 ‘‘(II) ‘$17,000,000’ in the case of

6 prior taxable years beginning after

7 December 31, 1993.’’

8 (b) EFFECTIVE DATE.—The amendment made by

9 subsection (a) shall apply to taxable years beginning after

10 December 31, 1994.

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