ENCOURAGEMENT OF CONTRIBUTIONS OF CAPITAL GAIN REAL PROPERTY MADE FOR CONSERVATION PURPOSES.

SEC. 1206. ENCOURAGEMENT OF CONTRIBUTIONS OF CAPITAL GAIN REAL PROPERTY MADE FOR CONSERVATION PURPOSES.(a) In General.—(1) Individuals.—Paragraph (1) of section 170(b) (relating to percentage limitations) is amended by redesignating subparagraphs (E) and (F) as subparagraphs (F) and (G), respectively, and by inserting after subparagraph (D) the following new subparagraph:“(E) Contributions of qualified conservation contributions.—“(i) In general.—Any qualified conservation contribution (as defined in subsection (h)(1)) shall be allowed to the extent the aggregate of such contributions does not exceed the excess of 50 percent of the taxpayer’s contribution base over the amount of all other charitable contributions allowable under this paragraph.“(ii) Carryover.—If the aggregate amount of contributions described in clause (i) exceeds the limitation of clause (i), such excess shall be treated (in a manner consistent with the rules of subsection (d)(1)) as a charitable contribution to which clause (i) applies in each of the 15 succeeding years in order of time.“(iii) Coordination with other subparagraphs.—For purposes of applying this subsection and subsection (d)(1), contributions described in clause (i) shall not be treated as described in subparagraph (A), (B), (C), or (D) and such subparagraphs shall apply without regard to such contributions.“(iv) Special rule for contribution of property used in agriculture or livestock production.—“(I) In general.—If the individual is a qualified farmer or rancher for the taxable year for which the contribution is made, clause (i) shall be applied by substituting ‘100 percent’ for ‘50 percent’.“(II) Exception.—Subclause (I) shall not apply to any contribution of property made after the date of the enactment of this subparagraph which is used in agriculture or livestock production (or available for such production) unless such contribution is subject to a restriction that such property remain available for such production. This subparagraph shall be applied separately with respect to property to which subclause (I) does not apply by reason of the preceding sentence prior to its application to property to which subclause (I) does apply.120 STAT. 1069“(v) Definition.—For purposes of clause (iv), the term ‘qualified farmer or rancher’ means a taxpayer whose gross income from the trade or business of farming (within the meaning of section 2032A(e)(5)) is greater than 50 percent of the taxpayer’s gross income for the taxable year.“(vi) Termination.—This subparagraph shall not apply to any contribution made in taxable years beginning after December 31, 2007.”.(2) Corporations.—Paragraph (2) of section 170(b) is amended to read as follows:“(2) Corporations.—In the case of a corporation—“(A) In general.—The total deductions under subsection (a) for any taxable year (other than for contributions to which subparagraph (B) applies) shall not exceed 10 percent of the taxpayer’s taxable income.“(B) Qualified conservation contributions by certain corporate farmers and ranchers.—“(i) In general.—Any qualified conservation contribution (as defined in subsection (h)(1))—“(I) which is made by a corporation which, for the taxable year during which the contribution is made, is a qualified farmer or rancher (as defined in paragraph (1)(E)(v)) and the stock of which is not readily tradable on an established securities market at any time during such year, and“(II) which, in the case of contributions made after the date of the enactment of this subparagraph, is a contribution of property which is used in agriculture or livestock production (or available for such production) and which is subject to a restriction that such property remain available for such production,shall be allowed to the extent the aggregate of such contributions does not exceed the excess of the taxpayer’s taxable income over the amount of charitable contributions allowable under subparagraph (A).“(ii) Carryover.—If the aggregate amount of contributions described in clause (i) exceeds the limitation of clause (i), such excess shall be treated (in a manner consistent with the rules of subsection (d)(2)) as a charitable contribution to which clause (i) applies in each of the 15 succeeding years in order of time.“(iii) Termination.—This subparagraph shall not apply to any contribution made in taxable years beginning after December 31, 2007.“(C) Taxable income.—For purposes of this paragraph, taxable income shall be computed without regard to—“(i) this section,“(ii) part VIII (except section 248),“(iii) any net operating loss carryback to the taxable year under section 172,“(iv) section 199, and“(v) any capital loss carryback to the taxable year under section 1212(a)(1).”.(b) Conforming Amendments.—120 STAT. 1070(1) Paragraph (2) of section 170(d) is amended by striking “subsection (b)(2)” each place it appears and inserting “subsection (b)(2)(A)”.(2) Section 545(b)(2) is amended by striking “and (D)” and inserting “(D), and (E)”.(c) Effective Date.—The amendments made by this section shall apply to contributions made in taxable years beginning after December 31, 2005.