POSTPONEMENT OF EFFECTIVE DATE OF CHANGES MADE BY THE TAX REFORM ACT OF 1976 IN THE METHOD OF ACCOUNTING FOR CERTAIN CORPORATIONS ENGAGED IN FARMING.

SEC. 404. POSTPONEMENT OF EFFECTIVE DATE OF CHANGES MADE BY THE TAX REFORM ACT OF 1976 IN THE METHOD OF ACCOUNTING FOR CERTAIN CORPORATIONS ENGAGED IN FARMING.Section 207(c)(2) of the Tax Reform Act of 1976 is amended to read as follows: “(2) Effective dates.— “(A) In general.—Except as provided in subparagraph (B), the amendments made by paragraph (1) shall apply to taxable years beginning after December 31, 1976. “(B) Special rule for certain corporations.—In the case of a corporation engaged in the trade or business of farming and with respect to which— “(i) members of two families (within the meaning of paragraph (1) of section 447(d) of the Internal Revenue Code of 1954, as added by paragraph (1)) owned, on October 4, 1976 (directly or through the application of such section 447(d)), at least 65 percent of the total combined voting power of all classes of stock of such corpo-91 STAT. 156ration entitled to vote, and at least 65 percent of the total number of shares of all other classes of stock of such corporation; or “(ii) members of three families (within the meaning of paragraph (1) of such section 447(d)) owned, on October 4, 1976 (directly or through the application of such section 447(d)), at least 50 percent of the total combined voting power of all classes of stock of such corporation entitled to vote, and at least 50 percent of the total number of shares of all other classes of stock of such corporation; and substantially all of the stock of such corporation which was not so owned (directly or through the application of such section 447(d)), by members of such three families was owned, on October 4, 1976, directly— “(I) by employees of the corporation or members of the families (within the meaning of section 267 (c) (4) of such Code) of such employees, or “(II) by a trust for the benefit of the employees of such corporation which is described in section 401 (a) of such Code and which is exempt from taxation under section 501(a) of such Code. the amendments made by paragraph (1) shall apply to taxable years beginning after December 31, 1977.”.