5-YEAR NET OPERATING LOSS CARRYBACK FOR FARMING LOSSES.

SEC. 2013. 5-YEAR NET OPERATING LOSS CARRYBACK FOR FARMING LOSSES. (a) In General.—Paragraph (1) of section 172(b) (relating to net operating loss deduction) is amended by adding at the end the following new subparagraph: “(G) Farming losses.—In the case of a taxpayer which has a farming loss (as defined in subsection (i)) for a taxable year, such farming loss shall be a net operating loss carryback to each of the 5 taxable years preceding the taxable year of such loss.”. (b) Farming Loss.—Section 172 is amended by redesignating subsection (i) as subsection (j) and by inserting after subsection (h) the following new subsection: “(i) Rules Relating to Farming Losses.—For purposes of this section— “(1) In general.—The term ‘farming loss’ means the lesser of— “(A) the amount which would be the net operating loss for the taxable year if only income and deductions attributable to farming businesses (as defined in section 263A(e)(4)) are taken into account, or “(B) the amount of the net operating loss for such taxable year. “(2) Coordination with subsection (b)(2).—For purposes of applying subsection (b)(2), a farming loss for any taxable year shall be treated in a manner similar to the manner in which a specified liability loss is treated. “(3) Election.—Any taxpayer entitled to a 5-year carryback under subsection (b)(1)(G) from any loss year may elect to have the carryback period with respect to such loss year determined without regard to subsection (b)(1)(G). Such election shall be made in such manner as may be prescribed 112 STAT. 2681–903by the Secretary and shall be made by the due date (including extensions of time) for filing the taxpayer’s return for the taxable year of the net operating loss. Such election, once made for any taxable year, shall be irrevocable for such taxable year.”. (c) Coordination With Farm Disaster Losses.—Clause (ii) of section 172(b)(1)(F) is amended by adding at the end the following flush sentence: “Such term shall not include any farming loss (as defined in subsection (i)).”. (d) Effective Date.—The amendments made by this section shall apply to net operating losses for taxable years beginning after December 31, 1997.