I 

108TH CONGRESS 

1ST SESSION H. R. 483

To amend the Internal Revenue Code of 1986 to provide involuntary conversion tax relief for producers forced to sell livestock due to weatherrelated conditions or Federal land management agency policy or action, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 29, 2003

Mr. MORAN of Kansas (for himself, Mrs. CUBIN, Mr. OSBORNE, Mr. 

REHBERG, and Mrs. MUSGRAVE) 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 

involuntary conversion tax relief for producers forced to 

sell livestock due to weather-related conditions or Federal 

land management agency policy or action, 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. SHORT TITLE. 

4 This Act may be cited as the ‘‘Livestock Reinvest5 ment Extension Act of 2003’’. 
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1 SEC. 2. INVOLUNTARY CONVERSION RELIEF FOR PRO2 DUCERS FORCED TO SELL LIVESTOCK DUE 

3 TO WEATHER-RELATED CONDITIONS OR FED4 ERAL LAND MANAGEMENT AGENCY POLICY 

5 OR ACTION. 

6 (a) INCOME INCLUSION RULES.—Subsection (e) of 

7 section 451 of the Internal Revenue Code of 1986 (relat8 ing to general rule for taxable year of inclusion) is amend9 ed to read as follows: 

10 ‘‘(e) SPECIAL RULE FOR PROCEEDS FROM LIVE11 STOCK SOLD ON ACCOUNT OF WEATHER-RELATED CON12 DITIONS OR FEDERAL LAND MANAGEMENT AGENCY POL13 ICY OR ACTION.—

14 ‘‘(1) IN GENERAL.—If—

15 ‘‘(A) a taxpayer sells or exchanges live16 stock in excess of the number the taxpayer 

17 would sell if he followed his usual business 

18 practices, and 

19 ‘‘(B) the taxpayer establishes that, under 

20 his usual business practices, the sale or ex21 change would not have occurred in the taxable 

22 year in which it occurred if it were not for—

23 ‘‘(i) a drought, flood, or other weath24 er-related condition that resulted in the 

25 area being designated as eligible for assist26 ance by the Federal Government, or 
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1 ‘‘(ii) forced sales resulting from Fed2 eral land management agency policy or ac3 tion, 

4 the taxpayer may elect to include income from such 

5 excess sales or exchanges for the second taxable year 

6 following the taxable year in which the circumstance 

7 applicable under subparagraph (B) ceased to exist. 

8 ‘‘(2) LIMITATION.—Paragraph (1) shall apply 

9 only to a taxpayer whose principal trade or business 

10 is farming (within the meaning of section 

11 6420(c)(3)). 

12 ‘‘(3) SPECIAL RULES FOR DROUGHT DESIGNA13 TIONS.—For purposes of this subsection, areas may 

14 be designated as eligible for drought condition as15 sistance—

16 ‘‘(A) by Federal Government declaration, 

17 or 

18 ‘‘(B) through Farm Service Agency flash 

19 reports as verified and approved by the Farm 

20 Service Agency director of the State in which 

21 such condition exists.’’. 

22 (b) RULES FOR REPLACEMENT OF INVOLUNTARILY

23 CONVERTED LIVESTOCK.—Subsection (e) of section 1033 

24 of such Code (relating to involuntary conversions) is 

25 amended to read as follows: 
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1 ‘‘(e) LIVESTOCK SOLD ON ACCOUNT OF WEATHER2 RELATED CONDITIONS OR FEDERAL LAND MANAGEMENT

3 AGENCY POLICY OR ACTION.—

4 ‘‘(1) IN GENERAL.—For purposes of this sub5 title, the sale or exchange of livestock (other than 

6 poultry) by the taxpayer in excess of the number the 

7 taxpayer would sell if he followed usual business 

8 practices, shall be treated as an involuntary conver9 sion to which this section applies if such livestock 

10 are sold or exchanged by the taxpayer solely on ac11 count of—

12 ‘‘(A) drought, flood, or other weather-re13 lated conditions, or 

14 ‘‘(B) forced sales caused by Federal land 

15 management agency policy or action. 

16 ‘‘(2) EXTENSION OF REPLACEMENT PERIOD.—

17 ‘‘(A) DROUGHTS, ETC.—In a case to which 

18 paragraph (1)(A) applies, the 2-year period in 

19 subsection (a)(2)(B) shall not expire before the 

20 later of—

21 ‘‘(i) 4 years after the close of the first 

22 taxable year in which any part of the gain 

23 upon the conversion is realized, or 

24 ‘‘(ii) 2 years after the close of the tax25 able year in which the drought, flood, or 
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1 other weather-related condition ceased to 

2 exist. 

3 ‘‘(B) FORCED SALES.—In a case to which 

4 paragraph (1)(B) applies, the 2-year period in 

5 subsection (a)(2)(B) shall not expire before 2 

6 years after the close of the taxable year in 

7 which the forced sales resulting from Federal 

8 land management agency policy or action have 

9 ended.’’. 

10 (3) CONVERSION BY HEIRS.—Section 

11 1033(a)(2) of such Code is amended by adding at 

12 the end the following new subparagraph: 

13 ‘‘(F) CONVERSION OF CERTAIN PROPERTY

14 BY HEIRS.—In the case of an involuntary con15 version of property described in subsection (e), 

16 if the taxpayer dies during the period specified 

17 in subparagraph (B), the requirements of sub18 paragraph (A) shall be satisfied if the dece19 dent’s—

20 ‘‘(i) personal representative, 

21 ‘‘(ii) the beneficiary of the converted 

22 property, if no personal representative ex23 ists, or 

24 ‘‘(iii) the trustee in the case of a 

25 trust, 
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1 replaces the property within such period.’’. 

2 (c) EFFECTIVE DATE.—The amendments made by 

3 this section shall apply to sales and exchanges after De4 cember 31, 2000.

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