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PUBLIC LAW 91-172-DEC. 30, 1%9
[83STAT
"(1) the deductions which would be allowable under this chapter for the taxable year without regard to whether or not such activity is engaged in for profit, and "(2) a deduction equal to the amount of the deductions which would be allowable under this chapter for the taxable year only if such activity were engaged in for profit, but only to the extent that the gross income derived from such activity for the taxable year exceeds the deductions allowable by reason of paragraph (1). "(c)
Post, p. 710. 68A Stat. 69.
K^p^ai-
ACTIVITY NOT ENGAGED I N FOR PROFIT DEFINED.—For pm-i
poses of this section, the term 'activity not engaged in for profit' means any activity other than one with respect to which deductions are allowable for the taxable year under section 162 or under para^^aph (1) or (2) of section 212. " (d) PRESUMPTION.—If the gross income derived from an activity for 2 or more of the taxable years in the period of 5 consecutive taxable years which ends with the taxable year exceeds the deductions attributable to such activity (determined without regard to whether or not such activity is engaged in for profit), then, unless the Secretary or his delegate establishes to the contrary, such activity shall be presumed for purposes of this chapter for such taxable year to be an activity engaged in for profit. I n the case of an activity which consists in major part of the breeding, training, showing, or racing of horses, the preceding sentence shall be applied by substituting the period of 7 consecutive taxable years for the period of 5 consecutive taxable years." (b) TECHNICAL AMENDMENT.—Section 270 (relating to limitation on deductions allowable to certain individuals) is repealed. (c) CLERICAL AMENDMENTS.—
(1) The table of sections for part VI of subchapter B of chapter 1 is amended by adding at the end thereof the following new item: "Sec. 183. Activities not engaged in for profit"
Ante, p. 566.
(2) The table of sections for part IX of subchapter B of chapter 1 is amended by striking out the item relating to section 270. (3) Section 6504 (relating to cross references) is amended by striking out the item relating to section 270. (d) EFFECTIA'F: DATE.—The amendments made by this section shall apply to taxable years beginning after December 31, 1969. SEC. 214. GAIN FROM DISPOSITION OF FARM LAND. (a) IN GENERAL.—Part IV of subchapter P of chapter 1 (relating to special rules for determining capital gains and losses) is amended by adding after section 1251 (added by section 211 of this Act) the following new section: "SEC. 1252. GAIN FROM DISPOSITION OF FARM LAND. "(a)
26^?c*i7y.' 76 Stat. 1063.
GENERAL RULE. — "(1) ORDINARY INCOME.—Except as otherwise provided in this
section, if farm land which the taxpayer has held for less than 10 years is disposed of during a taxable year beginning after December 31, 1969, the lower of— 1 " (A) the applicable percentage of the aggregate of the mttm deductions allowed under sections 175 (relating to soil and ' watcr conservation expenditures) and 182 (relating to expenditures by farmers for clearing land) for expenditures made by the taxpayer after December 31, 1969, with respect to the farm land or ia,.,
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