I 

108TH CONGRESS 

1ST SESSION H. R. 905

To amend the Internal Revenue Code of 1986 to simplify the application 

of self-employment tax in the case of family farming businesses. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 25, 2003

Mr. POMEROY (for himself and Mr. HOUGHTON) 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 simplify 

the application of self-employment tax in the case of 

family farming businesses.

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 ‘‘Family Farm Tax Sim5 plification Act of 2003’’.

6 SEC. 2. TREATMENT OF FARMING JOINT VENTURES BY 

7 HUSBAND AND WIFE. 

8 (a) IN GENERAL.—Section 761 of the Internal Rev9 enue Code of 1986 (defining terms for purposes of part10 nerships) is amended by redesignating subsection (f) as 
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1 subsection (g) and by inserting after subsection (e) the 

2 following new subsection: 

3 ‘‘(f) QUALIFIED FARMING JOINT VENTURE.—

4 ‘‘(1) IN GENERAL.—In the case of a qualified 

5 farming joint venture conducted by a husband and 

6 wife who file a joint return for the taxable year, for 

7 purposes of this title—

8 ‘‘(A) such joint venture shall not be treat9 ed as a partnership, 

10 ‘‘(B) all items of income, gain, loss, deduc11 tion, and credit shall be divided equally between 

12 the spouses, and 

13 ‘‘(C) each spouse shall take into account 

14 such spouse’s respective share of such items as 

15 if they were attributable to a trade or business 

16 conducted by such spouse as a sole proprietor. 

17 ‘‘(2) QUALIFIED FARMING JOINT VENTURE.—

18 For purposes of this paragraph (1), the term ‘quali19 fied farming joint venture’ means any joint venture 

20 involving the conduct of a farming business if—

21 ‘‘(A) the only members of such joint ven22 ture are a husband and wife, 

23 ‘‘(B) both spouses materially participate in 

24 such business (within the meaning of section 

25 1402(a)(1)(B)), and 
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1 ‘‘(C) both spouses elect the application of 

2 this subsection.’’. 

3 (b) NET EARNINGS FROM SELF-EMPLOYMENT.—

4 (1) Subsection (a) of section 1402 of such Code 

5 (defining net earnings from self-employment) is 

6 amended by striking ‘‘and’’ at the end of paragraph 

7 (14), by striking the period at the end of paragraph 

8 (15) and inserting ‘‘; and’’, and by inserting after 

9 paragraph (15) the following new paragraph: 

10 ‘‘(16) notwithstanding the preceding provisions 

11 of this subsection, each spouse’s share of income or 

12 loss from a qualified farming joint venture shall be 

13 taken into account as provided in section 761(f) in 

14 determining net earnings from self-employment of 

15 such spouse.’’. 

16 (2) Subsection (a) of section 211 of the Social 

17 Security Act (defining net earnings from self-em18 ployment) is amended by striking ‘‘and’’ at the end 

19 of paragraph (14), by striking the period at the end 

20 of paragraph (15) and inserting ‘‘; and’’, and by in21 serting after paragraph (15) the following new para22 graph: 

23 ‘‘(16) Notwithstanding the preceding provisions 

24 of this subsection, each spouse’s share of income or 

25 loss from a qualified farming joint venture shall be 
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1 taken into account as provided in section 761(f) of 

2 the Internal Revenue Code of 1986 in determining 

3 net earnings from self-employment of such spouse.’’. 

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

5 this section shall apply to taxable years beginning after 

6 December 31, 2002.

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