
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC1301]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
 Subchapter Q--Readjustment of Tax Between Years and Special Limitations
 
                        PART I--INCOME AVERAGING
 
Sec. 1301. Averaging of farm income


(a) In general

    At the election of an individual engaged in a farming business, the 
tax imposed by section 1 for such taxable year shall be equal to the sum 
of--
        (1) a tax computed under such section on taxable income reduced 
    by elected farm income, plus
        (2) the increase in tax imposed by section 1 which would result 
    if taxable income for each of the 3 prior taxable years were 
    increased by an amount equal to one-third of the elected farm 
    income.

Any adjustment under this section for any taxable year shall be taken 
into account in applying this section for any subsequent taxable year.

(b) Definitions

    In this section--

                       (1) Elected farm income

        (A) In general

            The term ``elected farm income'' means so much of the 
        taxable income for the taxable year--
                (i) which is attributable to any farming business; and
                (ii) which is specified in the election under subsection 
            (a).

        (B) Treatment of gains

            For purposes of subparagraph (A), gain from the sale or 
        other disposition of property (other than land) regularly used 
        by the taxpayer in such a farming business for a substantial 
        period shall be treated as attributable to such a farming 
        business.

                           (2) Individual

        The term ``individual'' shall not include any estate or trust.

                        (3) Farming business

        The term ``farming business'' has the meaning given such term by 
    section 263A(e)(4).

(c) Regulations

    The Secretary shall prescribe such regulations as may be appropriate 
to carry out the purposes of this section, including regulations 
regarding--
        (1) the order and manner in which items of income, gain, 
    deduction, or loss, or limitations on tax, shall be taken into 
    account in computing the tax imposed by this chapter on the income 
    of any taxpayer to whom this section applies for any taxable year, 
    and
        (2) the treatment of any short taxable year.

(Added Pub. L. 105-34, title IX, Sec. 933(a), Aug. 5, 1997, 111 Stat. 
881.)


                            Prior Provisions

    A prior section 1301, added Pub. L. 88-272, title II, Sec. 232(a), 
Feb. 26, 1964, 78 Stat. 106; amended Pub. L. 91-172, title III, 
Sec. 311(a), Dec. 30, 1969, 83 Stat. 586; Pub. L. 98-369, div. A, title 
I, Sec. 173(b), (c)(1), July 18, 1984, 98 Stat. 704, placed a limit on 
the tax attributable to averagable income, prior to repeal by Pub. L. 
99-514, title I, Secs. 141(a), 151(a), Oct. 22, 1986, 100 Stat. 2117, 
2121, effective Dec. 31, 1986.
    Another prior section 1301, act Aug. 16, 1954, ch. 736, 68A Stat. 
334, related to compensation from an employment, defined ``an 
employment'', and stated the rule with respect to partners, prior to the 
general revision of this part by Pub. L. 88-272.
    A prior section 1302, added Pub. L. 88-272, title II, Sec. 232(a), 
Feb. 26, 1964, 78 Stat. 106; amended Pub. L. 91-172, title III, 
Sec. 311(b), Dec. 30, 1969, 83 Stat. 586; Pub. L. 94-455, title VII, 
Sec. 701(f)(1), Oct. 4, 1976, 90 Stat. 1580; Pub. L. 95-30, title I, 
Sec. 102(b)(15), May 23, 1977, 91 Stat. 138; Pub. L. 95-600, title I, 
Sec. 101(d)(2), Nov. 6, 1978, 92 Stat. 2770; Pub. L. 95-615, 
Sec. 202(g)(5), formerly Sec. 202(f)(5), Nov. 8, 1978, 92 Stat. 3100, 
renumbered Pub. L. 96-222, title I, Sec. 108(a)(1)(A), Apr. 1, 1980, 94 
Stat. 223; Pub. L. 97-34, title I, Sec. 111(b)(3), Aug. 13, 1981, 95 
Stat. 194; Pub. L. 97-248, title II, Sec. 265(b)(2)(B), Sept. 3, 1982, 
96 Stat. 547; Pub. L. 98-369, div. A, title I, Sec. 173(a), (c)(2)-(4), 
July 18, 1984, 98 Stat. 703, 704, defined ``averagable income'' and 
other terms related to income averaging, prior to repeal by Pub. L. 99-
514, title I, Secs. 141(a), 151(a), Oct. 22, 1986, 100 Stat. 2117, 2121, 
effective Dec. 31, 1986.
    Another prior section 1302, act Aug. 16, 1964, ch. 736, 68A Stat. 
335, related to income from an invention or artistic work, prior to the 
general revision of this part by Pub. L. 88-272.
    A prior section 1303, added Pub. L. 88-272, title II, Sec. 232(a), 
Feb. 26, 1964, 78 Stat. 107; amended Pub. L. 91-172, title III, 
Sec. 311(d)(1), Dec. 30, 1969, 83 Stat. 587; Pub. L. 94-455, title XIX, 
Sec. 1901(b)(8)(G), Oct. 4, 1976, 90 Stat. 1795; Pub. L. 97-34, title I, 
Sec. 111(b)(4), Aug. 13, 1981, 95 Stat. 194; Pub. L. 99-272, title XIII, 
Sec. 13206(a), (b), Apr. 7, 1986, 100 Stat. 318, 319, related to 
individuals eligible for income averaging, prior to repeal by Pub. L. 
99-514, title I, Secs. 141(a), 151(a), Oct. 22, 1986, 100 Stat. 2117, 
2121, effective Dec. 31, 1986.
    Another prior section 1303, acts Aug. 16, 1954, ch. 736, 68A Stat. 
335, Sept. 22, 1961, Pub. L. 87-293, title II, Sec. 201(b), 75 Stat. 
625, related to income from back pay, prior to the general revision of 
this part by Pub. L. 88-272.
    A prior section 1304, added Pub. L. 88-272, title II, Sec. 232(a), 
Feb. 26, 1964, 78 Stat. 108; amended Pub. L. 91-172, title III, 
Sec. 311(c), (d)(2), title V, Sec. 515(c)(4), title VIII, 
Secs. 802(c)(5), 803(d)(8), Dec. 30, 1969, 83 Stat. 587, 646, 678, 684; 
Pub. L. 93-406, title II, Sec. 2005(c)(6), Sept. 2, 1974, 88 Stat. 991; 
Pub. L. 94-455, title III, Sec. 302(c), title V, Sec. 501(b)(7), title 
XIX, Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1555, 1559, 1834; Pub. 
L. 95-600, title IV, Sec. 401(b)(5), Nov. 6, 1978, 92 Stat. 2867; Pub. 
L. 95-615, Sec. 202(g)(5), formerly Sec. 202(f)(5), Nov. 8, 1978, 92 
Stat. 3100, renumbered Pub. L. 96-222, title I, Sec. 108(a)(1)(A), Apr. 
1, 1980, 94 Stat. 223; Pub. L. 97-34, title I, Secs. 101(c)(2)(B), 
111(b)(3), (4), Aug. 13, 1981, 95 Stat. 183, 194; Pub. L. 97-248, title 
II, Sec. 265(b)(2)(C), Sept. 3, 1982, 96 Stat. 547, set out special 
rules for income averaging, prior to repeal by Pub. L. 99-514, title I, 
Secs. 141(a), 151(a), Oct. 22, 1986, 100 Stat. 2117, 2121, effective 
Dec. 31, 1986.
    Another prior section 1304, act Aug. 11, 1955, ch. 804, Sec. 1(a), 
69 Stat. 688, related to compensatory damages for patent infringement, 
prior to the general revision of this part by Pub. L. 88-272.
    A prior section 1305, added Pub. L. 88-272, title II, Sec. 232(a), 
Feb. 26, 1964, 78 Stat. 110; amended Pub. L. 94-455, title XIX, 
Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834, provided for 
promulgation of regulations for income averaging, prior to repeal by 
Pub. L. 99-514, title I, Secs. 141(a), 151(a), Oct. 22, 1986, 100 Stat. 
2117, 2121, effective Dec. 31, 1986.
    Another prior section 1305, act Aug. 26, 1957, Pub. L. 85-165, 
Sec. 1, 71 Stat. 413, related to damages for breach of contract or 
fiduciary duty, prior to the general revision of this part by Pub. L. 
88-272.
    A prior section 1306, Pub. L. 85-866, title I, Sec. 58(a), Sept. 2, 
1958, 72 Stat. 1646, related to damages received for injuries under the 
antitrust laws, prior to the general revision of this part by Pub. L. 
88-272.
    A prior section 1307, act Aug. 16, 1954, ch. 736, 68A Stat. 336, 
Sec. 1307, formerly Sec. 1304; renumbered Sec. 1305, Aug. 11, 1955, ch. 
804, Sec. 1(a), 69 Stat. 688; renumbered Sec. 1306, Aug. 26, 1957, Pub. 
L. 85-165, Sec. 1, 71 Stat. 413; renumbered Sec. 1307, Sept. 2, 1958, 
Pub. L. 85-866, title I, Sec. 58(a), 72 Stat. 1646; amended Oct. 16, 
1962, Pub. L. 87-834, Sec. 22(a), 76 Stat. 1064, provided rules 
applicable to this part, prior to the general revision of this part by 
Pub. L. 88-272.


                             Effective Date

    Section 933(c) of Pub. L. 105-34, as amended by Pub. L. 105-277, 
div. J, title II, Sec. 2011, Oct. 21, 1998, 112 Stat. 2681-902, provided 
that: ``The amendments made by this section [enacting this section] 
shall apply to taxable years beginning after December 31, 1997.''
