AMORTIZATION DEDUCTION FOR GRAIN STORAGE FACILITIES.

SEC. 206. AMORTIZATION DEDUCTION FOR GRAIN STORAGE FACILITIES. (a) Allowance of Deduction.— Supplement B of subchapter C of chapter 1 is hereby amended by inserting after section 124A the following new section: “SEC. 124B. AMORTIZATION DEDUCTION FOR GRAIN STORAGE FACILITIES. “(a) Allowance of Deduction.— “(1) Original owner.—Any person who constructs, reconstructs, or erects a grain storage facility (as defined in subsection (d)) shall, at his election, be entitled to a deduction with respect to the amortization of the adjusted basis (for determining gain) of such facility based on a period of sixty months. The sixty-month period shall begin as to any such facility, at the election of the taxpayer, with the month following the month in which the facility was completed, or with the succeeding taxable year. “(2) Subsequent owners.— Any person who acquires a grain storage facility from a taxpayer who— “(A) elected under subsection (b) to take the amortization deduction provided by this subsection with respect to such facility, and “(B) did not discontinue the amortization deduction pursuant to subsection (c). shall, at his election, be entitled to a deduction with respect to the adjusted basis (determined under subsection (e) (2)) of such facility based on the period, if any, remaining (at the time of acquisition) in the sixty-month period elected under subsection (b) by the person who constructed, reconstructed, or erected such facility. “(3) Amount of deduction.—The amortization deduction provided in paragraphs (1) and (2) shall be an amount, with respect to each month of the amortization period within the taxable year, equal to the adjusted basis of the facility at the end of such month, divided by the number of months (including the month for which the deduction is computed) remaining in the period. Such 67 Stat. 621 adjusted basis at the end of the month shall be computed without regard to the amortization deduction for such month. The amortization deduction above provided with respect to any month shall be in lieu of the deduction with respect to such facility for such month provided by section 23 (1) (relating to exhaustion, wear and tear, and obsolescence). “(b) Election of Amortization.—The election of the taxpayer under subsection (a) (1) to take the amortization deduction and to begin the sixty-month period with the month following the month in which the facility was completed shall be made only by a statement to that effect in the return for the taxable year in which the facility was completed. The election of the taxpayer under subsection (a) (1) to take the amortization deduction and to begin such period with the taxable year succeeding such year shall be made only by a statement to that effect in the return for such succeeding taxable year. The election of the taxpayer under subsection (a) (2) to take the amortization deduction shall be made only by a statement to that effect in the return for the taxable year in which the facility was acquired. Notwithstanding the preceding three sentences, the election of the taxpayer under subsection (a) (1) or (2) may be made, under such regulations as the Secretary may prescribe, before the time prescribed in the applicable sentence. “(c) Termination of Amortization Deduction.—A taxpayer which has elected under subsection (b) to take the amortization deduction provided in subsection (a) may, at any time after making such election, discontinue the amortization deduction with respect to the remainder of the amortization period, such discontinuance to begin as of the beginning of any month specified by the taxpayer in a notice in writing filed with the Secretary before the beginning of such month. The deduction provided under section 23 (1) shall be allowed, beginning with the first month as to which the amortization deduction is not applicable, and the taxpayer shall not be entitled to any further amortization deduction with respect to such facility. “(d) Definition of Grain Storage Facility.— For the purposes of this section, the term ‘grain storage facility’ means— “(1) any corn crib, grain bin, or grain elevator, or any similar structure suitable primarily for the storage of grain, which crib, bin, elevator, or structure is intended by the taxpayer at the time of his election to be used for the storage of grain produced by him (or, if the election is made by a partnership, produced by the members thereof); and “(2) any public grain warehouse permanently equipped for receiving, elevating, conditioning, and loading out grain, the construction, reconstruction, or erection of which was completed after December 31, 1952, and on or before December 31, 1956. If any structure described in clause (1) or (2) of the preceding sentence is altered or remodeled so as to increase its capacity for the storage of grain, or if any structure is converted, through alteration or remodeling, into a structure so described, and if such alteration or remodeling was completed after December 31, 1952, and on or before December 31, 1956, such alteration or remodeling shall be treated as the construction of a grain storage facility. The term ‘grain storage facility’ shall include only property of a character which is subject to the allowance for depreciation provided in section 23 (1). The term ‘grain storage facility’ shall not include any facility any part of which is an emergency facility within the meaning of section 124A. 67 Stat. 622 “(e) Determination of Adjusted Basis.— “(1) Original owners.— For the purpose of subsection (a) (1)— “(A) in determining the adjusted basis of any grain storage facility, the construction, reconstruction, or erection of which was begun before January 1, 1953, there shall be included only so much of the amount of the adjusted basis (computed without regard to this subsection) as is properly attributable to such construction, reconstruction, or erection after December 31, 1952, and “(B) in determining the adjusted basis of any facility which is a grain storage facility within the meaning of the second sentence of subsection (d), there shall be included only so much of the amount otherwise included in such basis as is properly attributable to the alteration or remodeling. If any existing grain storage facility as defined in the first-sentence of subsection (d) is altered or remodeled as provided in the second sentence of subsection (d), the expenditures for such remodeling or alteration shall not be applied in adjustment of the basis of such existing facility but a separate basis shall be computed in respect of such facility as if the part altered or remodeled were a new and separate grain storage facility. “(2) Subsequent owners.—For the purpose of subsection (a) (2), the adjusted basis of any grain storage facility shall be whichever of the following amounts is the smaller: (A) The basis (unadjusted) of such facility for the purposes of this section in the hands of the transferor, donor, or grantor, adjusted as if such facility in the hands of the taxpayer had a substitute basis within the meaning of section 113 (b) (2) (A), or (B) so much of the adjusted basis (for determining gain) of the facility in the hands of the taxpayer (as computed without regard to this subsection) as is properly attributable to construction, reconstruction, or erection after December 31, 1952. “(f) Depreciation Deduction.—If the adjusted basis of the grain storage facility (computed without regard to subsection (e) (exceeds the adjusted basis computed under subsection (e), the deduction provided by section 23 (1) shall, despite the provisions of subsection (a) (3) of this section, be allowed with respect to such grain storage facility as if the adjusted basis for the purpose of such deduction were an amount equal to the amount of such excess. “(g) Life Tenant and Remainderman.—In the case of property held by one person for life with remainder to another person, the amortization deduction provided in subsection (a) shall be computed as if the life tenant were the absolute owner of the property and shall be allowed to the life tenant.” (b) Technical Amendments.— (1) Section 23 (t) is hereby amended to read as follows: “(t) Amortization Deduction.—The deduction for amortization provided in sections 124, 124A, and 124B.” (2) Section 172 is hereby amended by striking out “of emergency facilities”. (3) Section 190 is hereby amended by inserting after “emergency facilities” the following: “or grain storage facilities”. (c) Effective Date.—The amendments made by subsections (a) and (b) shall apply only with respect to taxable years ending after the date of the enactment of this Act.