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.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Family Farm Tax Sim-
plification Act of 2003’’.
SEC. 2. TREATMENT OF FARMING JOINT VENTURES BY 
HUSBAND AND WIFE. 
(a) IN GENERAL.—Section 761 of the Internal Rev-
enue Code of 1986 (defining terms for purposes of part-
nerships) is amended by redesignating subsection (f) as
subsection (g) and by inserting after subsection (e) the 
following new subsection: 
‘‘(f) QUALIFIED FARMING JOINT VENTURE.—
‘‘(1) IN GENERAL.—In the case of a qualified 
farming joint venture conducted by a husband and 
wife who file a joint return for the taxable year, for 
purposes of this title—
‘‘(A) such joint venture shall not be treat-
ed as a partnership, 
‘‘(B) all items of income, gain, loss, deduc-
tion, and credit shall be divided equally between 
the spouses, and 
‘‘(C) each spouse shall take into account 
such spouse’s respective share of such items as 
if they were attributable to a trade or business 
conducted by such spouse as a sole proprietor. 
‘‘(2) QUALIFIED FARMING JOINT VENTURE.—
For purposes of this paragraph (1), the term ‘quali-
fied farming joint venture’ means any joint venture 
involving the conduct of a farming business if—
‘‘(A) the only members of such joint ven-
ture are a husband and wife, 
‘‘(B) both spouses materially participate in 
such business (within the meaning of section 
1402(a)(1)(B)), and
‘‘(C) both spouses elect the application of 
this subsection.’’. 
(b) NET EARNINGS FROM SELF-EMPLOYMENT.—
(1) Subsection (a) of section 1402 of such Code 
(defining net earnings from self-employment) is 
amended by striking ‘‘and’’ at the end of paragraph 
(14), by striking the period at the end of paragraph 
(15) and inserting ‘‘; and’’, and by inserting after 
paragraph (15) the following new paragraph: 
‘‘(16) notwithstanding the preceding provisions 
of this subsection, each spouse’s share of income or 
loss from a qualified farming joint venture shall be 
taken into account as provided in section 761(f) in 
determining net earnings from self-employment of 
such spouse.’’. 
(2) Subsection (a) of section 211 of the Social 
Security Act (defining net earnings from self-em-
ployment) is amended by striking ‘‘and’’ at the end 
of paragraph (14), by striking the period at the end 
of paragraph (15) and inserting ‘‘; and’’, and by in-
serting after paragraph (15) the following new para-
graph: 
‘‘(16) Notwithstanding the preceding provisions 
of this subsection, each spouse’s share of income or 
loss from a qualified farming joint venture shall be
taken into account as provided in section 761(f) of 
the Internal Revenue Code of 1986 in determining 
net earnings from self-employment of such spouse.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2002.
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