I
103D CONGRESS
1ST SESSION
H. R. 1747
To amend the Internal Revenue Code of 1986 to provide for rollover of
gain from sale of farm assets into an individual retirement account.
IN THE HOUSE OF REPRESENTATIVES
APRIL 20, 1993
Mr. SENSENBRENNER 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
for rollover of gain from sale of farm assets into an
individual retirement account.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCE TO INTERNAL REV-
ENUE CODE.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Family Farm Tax Relief and Savings Act of 1993’’.
(b) REFERENCE TO INTERNAL REVENUE CODE OF
1986.—Except as otherwise expressly provided, whenever
in this Act an amendment or repeal is expressed in terms
of an amendment to, or repeal of, a section or other provi-
sion, the reference shall be considered to be made to a
section or other provision of the Internal Revenue Code
of 1986.
SEC. 2. ROLLOVER OF GAIN FROM SALE OF FARM ASSETS
TO INDIVIDUAL RETIREMENT PLANS.
(a) IN GENERAL.—Part III of subchapter O of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to
common nontaxable exchanges) is amended by inserting
after section 1034 the following new section:
‘‘SEC. 1034A. ROLLOVER OF GAIN ON SALE OF FARM ASSETS
INTO ASSET ROLLOVER ACCOUNT.
‘‘(a) NONRECOGNITION OF GAIN.—If a taxpayer has
a qualified net farm gain from the sale of a qualified farm
asset, then, at the election of the taxpayer, gain (if any)
from such sale shall be recognized only to the extent such
gain exceeds the contributions which—
‘‘(1) are to 1 or more asset rollover accounts of
the taxpayer for the taxable year in which such sale
occurs, and
‘‘(2) are not in excess of the limits under sub-
section (c).
‘‘(b) ASSET ROLLOVER ACCOUNT.—
‘‘(1) GENERAL RULE.—Except as provided in
this section, an asset rollover account shall be treat-
ed for purposes of this title in the same manner as
an individual retirement plan.
‘‘(2) ASSET
ROLLOVER
ACCOUNT.—For pur-
poses of this title, the term ‘asset rollover account’
means an individual retirement plan which is des-
ignated at the time of the establishment of the plan
as an asset rollover account. Such designation shall
be made in such manner as the Secretary may pre-
scribe.
‘‘(c) CONTRIBUTION RULES.—
‘‘(1) NO DEDUCTION ALLOWED.—No deduction
shall be allowed under section 219 for a contribution
to an asset rollover account.
‘‘(2) 
AGGREGATE
CONTRIBUTION
LIMITA-
TION.—Except in the case of rollover contributions,
the aggregate amount for all taxable years which
may be contributed to all asset rollover accounts es-
tablished on behalf of an individual during a quali-
fied period shall not exceed—
‘‘(A) $500,000 ($250,000 in the case of a
separate return by a married individual), re-
duced by
‘‘(B) the amount by which the aggregate
value of the assets held by the individual (and
spouse) in individual retirement plans (other
than asset rollover accounts) exceeds $100,000.
‘‘(3) ANNUAL CONTRIBUTION LIMITATIONS.—
‘‘(A) GENERAL RULE.—The qualified con-
tribution which may be made in any taxable
year shall not exceed the lesser of—
‘‘(i) the qualified net farm gain for
the taxable year, or
‘‘(ii) an amount determined by mul-
tiplying the number of years the taxpayer
is a qualified farmer by $10,000.
‘‘(B) SPOUSE.—In the case of a married
couple filing a joint return under section 6013
for the taxable year, subparagraph (A) shall be
applied by substituting ‘$20,000’ for ‘$10,000’
for each year the taxpayer’s spouse is a quali-
fied farmer.
‘‘(4) TIME
WHEN
CONTRIBUTION
DEEMED
MADE.—For purposes of this section, a taxpayer
shall be deemed to have made a contribution to an
asset rollover account on the last day of the preced-
ing taxable year if the contribution is made on ac-
count of such taxable year and is made not later
than the time prescribed by law for filing the return
for such taxable year (not including extensions
thereof).
‘‘(d) QUALIFIED NET FARM GAIN; ETC.—For pur-
poses of this section—
‘‘(1) QUALIFIED NET FARM GAIN.—The term
‘qualified net farm gain’ means the lesser of—
‘‘(A) the net capital gain of the taxpayer
for the taxable year, or
‘‘(B) the net capital gain for the taxable
year determined by only taking into account
gain (or loss) in connection with a disposition
of a qualified farm asset.
‘‘(2) QUALIFIED
FARM
ASSET.—The term
‘qualified farm asset’ means an asset used by a
qualified farmer in the active conduct of the trade
or business of farming (as defined in section
2032A(e)).
‘‘(3) QUALIFIED FARMER.—
‘‘(A) IN
GENERAL.—The term ‘qualified
farmer’ means a taxpayer who—
‘‘(i) during the 5-year period ending
on the date of the disposition of a qualified
farm asset materially participated in the
trade or business of farming, and
‘‘(ii) 50 percent or more of such trade
or business is owned by the taxpayer (or
his spouse) during such 5-year period.
‘‘(B) 
MATERIAL
PARTICIPATION.—For
purposes of this paragraph, a taxpayer shall be
treated as materially participating in a trade or
business if he meets the requirements of section
2032A(e)(6).
‘‘(4) 
ROLLOVER
CONTRIBUTIONS.—Rollover
contributions to an asset rollover account may be
made only from other asset rollover accounts.
‘‘(e) DISTRIBUTION RULES.—For purposes of this
title, the rules of paragraphs (1) and (2) of section 408(d)
shall apply to any distribution from an asset rollover ac-
count.
‘‘(f) INDIVIDUAL REQUIRED TO REPORT QUALIFIED
CONTRIBUTIONS.—
‘‘(1) IN GENERAL.—Any individual who—
‘‘(A) makes a qualified contribution to any
asset rollover account for any taxable year, or
‘‘(B) receives any amount from any asset
rollover account for any taxable year,
shall include on the return of tax imposed by chap-
ter 1 for such taxable year and any succeeding tax-
able year (or on such other form as the Secretary
may prescribe) information described in paragraph
(2).
‘‘(2) INFORMATION
REQUIRED
TO
BE
SUP-
PLIED.—The information described in this para-
graph is information required by the Secretary
which is similar to the information described in sec-
tion 408(o)(4)(B).
‘‘(3) PENALTIES.—For penalties relating to re-
ports under this paragraph, see section 6693(b).’’
(b) CONTRIBUTIONS
NOT
DEDUCTIBLE.—Section
219(d) of the Internal Revenue Code of 1986 (relating to
other limitations and restrictions) is amended by adding
at the end thereof the following new paragraph:
‘‘(5) CONTRIBUTIONS TO ASSET ROLLOVER AC-
COUNTS.—No deduction shall be allowed under this
section with respect to a contribution under section
1034A.’’
(c) EXCESS CONTRIBUTIONS.—
(1) IN GENERAL.—Section 4973 of the Internal
Revenue Code of 1986 (relating to tax on excess
contributions to individual retirement accounts, cer-
tain section 403(b) contracts, and certain individual
retirement annuities) is amended by adding at the
end the following new subsection:
‘‘(d) ASSET ROLLOVER ACCOUNTS.—For purposes of
this section, in the case of an asset rollover account re-
ferred to in subsection (a)(1), the term ‘excess contribu-
tion’ means the excess (if any) of the amount contributed
for the taxable year to such account over the amount
which may be contributed under section 1034A.’’
(2) CONFORMING AMENDMENTS.—
(A) Section 4973(a)(1) of such Code is
amended by striking ‘‘or’’ and inserting ‘‘an
asset rollover account (within the meaning of
section 1034A), or’’.
(B) The heading for section 4973 of such
Code is amended by inserting ‘‘ASSET ROLL-
OVER ACCOUNTS,’’ after ‘‘CONTRACTS’’.
(C) The table of sections for chapter 43 of
such Code is amended by inserting ‘‘asset roll-
over accounts,’’ after ‘‘contracts’’ in the item
relating to section 4973.
(d) TECHNICAL AMENDMENTS.—
(1) Paragraph (1) of section 408(a) of the In-
ternal Revenue Code of 1986 (defining individual re-
tirement account) is amended by inserting ‘‘or a
qualified contribution under section 1034A,’’ before
‘‘no contribution’’.
(2) Subparagraph (A) of section 408(d)(5) of
such Code is amended by inserting ‘‘or qualified con-
tributions under section 1034A’’ after ‘‘rollover con-
tributions’’.
(3)(A) Section 6693(b)(1) of such Code is
amended by inserting ‘‘or 1034A(f)(2)’’ after
‘‘408(o)(4)’’ in subparagraph (A).
(B) Section 6693(b)(2) of such Code is amend-
ed by inserting ‘‘or 1034A(f)(2)’’ after ‘‘408(o)(4)’’.
(4) The table of sections for part III of sub-
chapter O of chapter 1 of such Code is amended by
inserting after the item relating to section 1034 the
following new item:
‘‘Sec. 1034A. Rollover of gain on sale of farm assets into asset rollover ac-
count.’’
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to sales and exchanges after the
date of enactment of this Act.
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