Page:United States Statutes at Large Volume 65.djvu/535

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65 STAT.] "(f)

PUBLIC LAW 183—OCT. 20, 1951

501

SALE OF LAND W I T H UNHARVESTED CROP.—Where an unhar-

vested crop sold by the taxpayer is considered under the provisions of section 117(j)(3) as 'property used in the trade or business', in com- Ante,v.50o. puting net income no deduction (whether or not for the taxable year of the sale and whether for expenses, depreciation, or otherwise) attributable to the production of such crop shall be allowed." (2) AMENDMENT OF SECTION 113 (b)(1).—Section 113(b)(1) gu**|-.t3:§ 113(b) (relating to adjustments to basis) is hereby amended by adding (i). at the end thereof a new subparagraph to read as follows: "*"**' ^^' ^^^' ^ ^ ®" " (L) for deductions to the extent disallowed under section 24 (f), notwithstanding the provisions of any other sub- Ante,p. 500. paragraph of this paragraph." (c) EFFECTIVE DATE.—The amendment made by subsection (a) shall be applicable only with respect to sales, exchanges, and conversions, occurring in taxable years beginning after December 31, 1950. The amendments made by subsection (b) shall be applicable to any taxable year for which a deduction is disallowed by reason of sales, exchanges, or conversions to which subsection (a) is applicable. SEC. 324. SALES OF LIVESTOCK. Section 117(j)(1) is hereby amended by adding at the end thereof the following new sentences: "Such term also includes livestock, regardless of age, held by the taxpayer for draft, breeding, or dairy purposes, and held by him for 12 months or more from the date of acquisition. Such term does not include poultry." The first sentence added to section 117(j)(1) by the amendment made by this section shall be applicable with respect to taxable years beginning after December 31, 1941, except that the extension of the holding period from 6 to 12 months shall be applicable only with respect to taxable years beginning after December 31, 1950. The second sentence added to section 117(j)(1) by the amendment made by this section shall be applicable only with respect to taxable years beginning after December 31, 1950.

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SEC. 3 5 TAX TREATMENT OF COAL ROYALTIES. 2. (a)

DEFINITION OF PROPERTY USED IN THE TRADE OR BUSINESS.—

Section 117(j)(1) (relating to the definition of property used in the Ante.p.500. trade or business) is hereby amended by adding after the word "timber" in the second sentence thereof the following: "or coal". (b) G A I N OR Loss UPON CERTAIN DISPOSALS OF TIMBER OR COAL.— Section 117(k)(2) (relating to the disposal of timber) is hereby 26 u^s *c'§ 1 7 (k) 1 amended to read as follows: (2). ' ' " "(2) I n the case of the disposal of timber or coal (including lignite), held for more than 6 months prior to such disposal, by the owner thereof under any form or type of contract by virtue of which the owner retains an economic interest in such timber or coal, the difference between the amount received for such timber or coal and the adjusted depletion basis thereof shall be considered as though it were a gain or loss, as the case may be, upon the sale of such timber or coal. Such owner shall not be entitled to the allowance for percentage depletion provided for in section 114 (b)(4) with respect to such coal. This paragraph shall not Ante.p.m. applj^ to income realized by the owner as a co-adventurer, partner, or principal in the mining of such coal. The date of disposal of such coal shall be deemed to be the date such coal is mined. I n determining the gross income, the adjusted gross income, or the net income of the lessee, the deductions allowable with respect to rents and royalties shall be determined without regard to the provisions of this paragraph. This paragraph shall have no application, in the case of coal, for the purposes of applying sec-