AMENDMENTS TO FARM LOSS RECAPTURE RULES.

SEC. 206. AMENDMENTS TO FARM LOSS RECAPTURE RULES. (a) Termination of Additions to Excess Deductions Account.— Paragraph (2) of section 1251(b) (relating to additions to excess deductions account) is amended by adding at the end thereof the following new subparagraph: “(E) Termination of additions.— No amount shall be added to the excess deductions account for any taxable year beginning after December 31, 1975.” (b) Certain Reorganizations.— (1) Subparagraph (A) of section 1251(b)(5) is amended to read as follows: “(A) Certain corporate transactions.— “(i) in the case of a transfer described in subsection (d)(3) to which section 371(a), 374(a), or 381 applies, the acquiring corporation shall succeed to and take into account as of the close of the day of distribution or transfer, the excess deductions account of the transferor. “(ii) in the case of a transfer which is described in subsection (d)(3), which is in connection with a reorganization described in section 368(a)(1)(D), and which is not described in clause (i), the transferee corporation shall be deemed to have an excess deductions account in an amount equal to the amount in the excess deductions account of the transferor. The transferor’s excess deductions account shall not be reduced by reason of the preceding sentence.” (2) Paragraph (3) of section 1251(b) is amended by adding at the end thereof the following: “In the case of a corporation which has made or received a transfer described in clause (ii) of paragraph (5)(A), subtractions from the excess deductions account shall be determined, in such 90 STAT. 1536manner as the Secretary shall prescribe, applying this paragraph to the farm net income, and the amounts described in subparagraph (B), of the transferor corporation and the transferee corporation on an aggregate basis.”. (3) The amendments made by tins subsection shall apply to transfers occurring after December 31, 1975.