CAPITALIZATION OF COSTS OF PLANTING AND DEVELOPING CITRUS GROVES.

SEC. 216. CAPITALIZATION OF COSTS OF PLANTING AND DEVELOPING CITRUS GROVES. (a) Requirement of Capitalization.—Part IX of subchapter B of chapter 1 (relating to items not deductible) is amended by adding after section 277 (added by section 121(b)(3) of this Act) the following new section: 83 Stat. 574 “SEC. 278. CAPITAL EXPENDITURES INCURRED IN PLANTING AND DEVELOPING CITRUS GROVES. “(a) General Rule.—Except as provided in subsection (b) any amount (allowable as a deduction without regard to this section), which is attributable to the planting, cultivation, maintenance or development of any citrus grove (or part thereof), and which is incurred before the close of the fourth taxable year beginning with the taxable year in which the trees were planted, shall be charged to capital account. For purposes of the preceding sentence, the portion of a citrus grove planted in one taxable year shall be treated separately from the portion of such grove planted in another taxable year. “(b) Exceptions.—Subsection (a) shall not apply to amounts allowable as deductions (without regard to this section), and attributable to a citrus grove (or part thereof) which was: “(1) replanted after having been lost or damaged (while in the hands of the taxpayer), by reason of freeze, disease, drought, pests or casualty, or “(2) planted or replanted prior to the enactment of this section.” (b) Clerical Amendment.—The table of sections for such part IX is amended by adding at the end thereof the following new item: “Sec. 278. Capital expenditures incurred in planting and developing citrus groves.” (c) Effective Date.—The amendments made by this section shall apply to taxable years beginning after December 31, 1969.