‘‘(C) MEMBERS OF FAMILY.—The family 
of any individual shall include only his spouse 
and children, grandchildren, and great grand-
children (whether by the whole or half blood), 
and the spouses of his children, grandchildren, 
and great grandchildren, who reside in the 
same household or jointly operate farming busi-
nesses (as defined in section 263A(e)(4)). For 
purposes of the preceding sentence, a child who 
is legally adopted, or who is placed with the 
taxpayer by an authorized placement agency for 
adoption by the taxpayer, shall be treated as a 
child by blood. 
‘‘(4) QUALIFIED INVESTMENTS.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
investments’ means a payment of cash for the 
purchase of a qualified equity interest in a 
farmer-owned entity. 
‘‘(B) QUALIFIED EQUITY INTEREST.—The 
term ‘qualified equity interest’ means— 
‘‘(i) any stock in a domestic corpora-
tion if such stock is acquired by the tax-
payer after December 31, 2004, and before 
January 1, 2011, at its original issue (di-
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rectly or through an underwriter) from the 
corporation solely in exchange for cash, 
‘‘(ii) any capital or profits interest in 
a domestic partnership if such interest is 
acquired by the taxpayer after December 
31, 2004, and before January 1, 2011, and 
‘‘(iii) any patronage interest in a co-
operative if such interest is acquired by the 
taxpayer after December 31, 2004, and be-
fore January 1, 2011. 
Rules similar to the rules of section 1202(c)(3) 
shall apply for purposes of this paragraph. 
‘‘(d) SPECIAL RULES.—For purposes of this sec-
tion— 
‘‘(1) TREATMENT OF MARRIED INDIVIDUALS.— 
In the case of a separate return by a married indi-
vidual (as defined in section 7703), subsection 
(b)(3)(A) shall be applied by substituting ‘$15,000’ 
for ‘$30,000’. 
‘‘(2) APPLICABLE
RULES.—Under regulations 
prescribed by the Secretary— 
‘‘(A) ALLOCATION OF CREDIT IN THE CASE 
OF ESTATES AND TRUSTS.—Rules similar to the 
rules of subsection (d) of section 52 shall apply. 
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‘‘(B) CERTAIN
PROPERTY
NOT
ELIGI-
BLE.—Rules similar to the rules of section 
50(b) shall apply. 
‘‘(3) BASIS
ADJUSTMENT.—For purposes of 
this subtitle, if a credit is allowed under this section 
to any eligible person with respect to qualified value- 
added agricultural property, the basis of such prop-
erty shall be reduced by the amount of the credit so 
allowed and increased by the amount of recapture 
under subsection (e). 
‘‘(e) RECAPTURE IN THE CASE OF CERTAIN DISPOSI-
TIONS.— 
‘‘(1) IN
GENERAL.—Under regulations pre-
scribed by the Secretary, rules similar to the rules 
of section 50(a) shall apply with respect to an eligi-
ble person if, within the 5-year period beginning on 
the date qualified value-added agricultural property 
with respect to which such person was allowed a 
credit under subsection (a) is originally placed in 
service— 
‘‘(A) such property ceases to be qualified 
for purposes of this section, 
‘‘(B) the eligible person or the farmer- 
owned entity (as the case may be) disposes of 
all or part of such property, or 
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‘‘(C) the eligible person or the farmer- 
owned entity (as the case may be) ceases to be 
an eligible person or farmer-owned entity for 
purposes of this section. 
‘‘(2) SPECIAL RULES IN EVENT OF DEATH.— 
‘‘(A) IN GENERAL.—The period in para-
graph (1) shall be suspended with respect to an 
eligible person for the 2-year period beginning 
on the date of death of such person. 
‘‘(B) HEIRS
WHO
ARE
ELIGIBLE
PER-
SONS.—In the case that an heir of an eligible 
person is also an eligible person, neither para-
graph (1) nor subparagraph (A) of this para-
graph (unless elected by such heir) shall apply 
with respect to the transfer of property to such 
heir. 
‘‘(f) REGULATIONS.—The Secretary shall prescribe 
such regulations as may be necessary to carry out the pur-
poses of this section. 
‘‘(g) TERMINATION.—This section shall not apply to 
property placed in service after December 31, 2012.’’. 
(b) CREDIT ALLOWED AS PART OF GENERAL BUSI-
NESS CREDIT.—Section 38(b) of such Code (defining cur-
rent year business credit) is amended by striking ‘‘and’’ 
at the end of paragraph (29), by striking the period at 
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the end of paragraph (30) and inserting ‘‘, and’’, and by 
adding at the end the following new paragraph: 
‘‘(31) in the case of an eligible person (as de-
fined in section 45N(c)(2)) or farmer-owned entity 
(as defined in section 45N(c)(3)), the value-added 
agricultural property investment credit determined 
under section 45N(a).’’. 
(c) CREDIT ALLOWABLE AGAINST MINIMUM TAX.— 
Subparagraph (B) of section 38(c)(4) of such Code is 
amended by striking ‘‘and’’ at the end of clause (i), by 
striking the period at the end of clause (ii) and inserting 
‘‘, and’’, and by adding at the end the following new 
clause: 
‘‘(iii) the credit determined under sec-
tion 45N (relating to value-added agricul-
tural property investment credit).’’. 
(d) DEDUCTION FOR CERTAIN UNUSED BUSINESS 
CREDITS.—Subsection (c) of section 196 of such Code is 
amended by striking ‘‘and’’ at the end of paragraph (12), 
by striking the period at the end of paragraph (13) and 
inserting ‘‘, and’’, and by adding at the end the following 
new paragraph: 
‘‘(14) the value-added agricultural property in-
vestment credit determined under section 45N.’’. 
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(e) BASIS ADJUSTMENT.—Subsection (a) of section 
1016 of such Code is amended by striking ‘‘and’’ at the 
end of paragraph (36), by striking the period at the end 
of paragraph (37) and inserting ‘‘, and’’, and by adding 
at the end the following new paragraph: 
‘‘(38) to the extent provided in section 
45N(d)(3), in the case of payments with respect to 
which a credit has been allowed under section 38.’’. 
(f) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of such Code is amended by adding at the end thereof 
the following new item: 
‘‘Sec. 45N. Value-added agricultural property investment credit.’’. 
(g) EFFECTIVE DATE.—The amendments made by 
this section shall apply to qualified investments (as defined 
in section 45N(c)(4) of the Internal Revenue Code of 
1986, as added by this section) made, and property placed 
in service, after December 31, 2006. 
Æ 
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