EXPENSING OF CERTAIN REFORESTATION EXPENDITURES.

SEC. 322. EXPENSING OF CERTAIN REFORESTATION EXPENDITURES.(a) In General.—So much of subsection (b) of section 194 (relating to amortization of reforestation expenditures) as precedes paragraph (2) is amended to read as follows:“(b) Treatment as Expenses.—“(1) Election to treat certain reforestation expenditures as expenses.—“(A) In general.—In the case of any qualified timber property with respect to which the taxpayer has made (in accordance with regulations prescribed by the Secretary) an election under this subsection, the taxpayer shall treat reforestation expenditures which are paid or incurred during the taxable year with respect to such property as an expense which is not chargeable to capital account. The reforestation expenditures so treated shall be allowed as a deduction.“(B) Dollar limitation.—The aggregate amount of reforestation expenditures which may be taken into account under subparagraph (A) with respect to each qualified timber property for any taxable year shall not exceed 118 STAT. 1475 $10,000 ($5,000 in the case of a separate return by a married individual (as defined in section 7703)).”. (b) Net Amortizable Basis.—Section 194(c)(2) (defining amortizable basis) is amended by inserting “which have not been taken into account under subsection (b)” after “expenditures”.(c) Conforming Amendments.—(1) Section 194(b) is amended by striking paragraphs (3) and (4).(2) Section 194(b)(2) is amended by striking “paragraph (1)” both places it appears and inserting “paragraph (1)(B)”.(3) Section 194(c) is amended by striking paragraph (4) and inserting the following new paragraphs:“(4) Treatment of trusts and estates.—“(A) In general.—Except as provided in subparagraph (B), this section shall not apply to trusts and estates.“(B) Amortization deduction allowed to estates.—The benefit of the deduction for amortization provided by subsection (a) shall be allowed to estates in the same manner as in the case of an individual. The allowable deduction shall be apportioned between the income beneficiary and the fiduciary under regulations prescribed by the Secretary. Any amount so apportioned to a beneficiary shall be taken into account for purposes of determining the amount allowable as a deduction under subsection (a) to such beneficiary.“(5) Application with other deductions.—No deduction shall be allowed under any other provision of this chapter with respect to any expenditure with respect to which a deduction is allowed or allowable under this section to the taxpayer.”.(4) The heading for section 194 is amended by striking “amortization” and inserting “treatment”.(5) The item relating to section 194 in the table of sections for part VI of subchapter B of chapter 1 is amended by striking “Amortization” and inserting “Treatment”.(d) Repeal of Reforestation Credit.—(1) In general.—Section 46 (relating to amount of credit) is amended—(A) by adding “and” at the end of paragraph (1),(B) by striking “, and” at the end of paragraph (2) and inserting a period, and(C) by striking paragraph (3).(2) Conforming amendments.—(A) Section 48 is amended—(i) by striking subsection (b),(ii) by striking “this subsection” in paragraph (5) of subsection (a) and inserting “subsection (a)”, and(iii) by redesignating such paragraph (5) as subsection (b).(B) The heading for section 48 is amended by striking “; reforestation credit”.(C) The item relating to section 48 in the table of sections for subpart E of part IV of subchapter A of chapter 1 is amended by striking “, reforestation credit”.(D) Section 50(c)(3) is amended by striking “or reforestation credit”.118 STAT. 1476(e) Effective Date.—The amendments made by this section shall apply with respect to expenditures paid or incurred after the date of the enactment of this Act.