
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC58]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
              Subchapter A--Determination of Tax Liability
 
                    PART VI--ALTERNATIVE MINIMUM TAX
 
Sec. 58. Denial of certain losses


(a) Denial of farm loss

                           (1) In general

        For purposes of computing the amount of the alternative minimum 
    taxable income for any taxable year of a taxpayer other than a 
    corporation--

        (A) Disallowance of farm loss

            No loss of the taxpayer for such taxable year from any tax 
        shelter farm activity shall be allowed.

        (B) Deduction in succeeding taxable year

            Any loss from a tax shelter farm activity disallowed under 
        subparagraph (A) shall be treated as a deduction allocable to 
        such activity in the 1st succeeding taxable year.

                    (2) Tax shelter farm activity

        For purposes of this subsection, the term ``tax shelter farm 
    activity'' means--
            (A) any farming syndicate as defined in section 464(c), and
            (B) any other activity consisting of farming which is a 
        passive activity (within the meaning of section 469(c)).

          (3) Application to personal service corporations

        For purposes of paragraph (1), a personal service corporation 
    (within the meaning of section 469(j)(2)) shall be treated as a 
    taxpayer other than a corporation.

                      (4) Determination of loss

        In determining the amount of the loss from any tax shelter farm 
    activity, the adjustments of sections 56 and 57 shall apply.

(b) Disallowance of passive activity loss

    In computing the alternative minimum taxable income of the taxpayer 
for any taxable year, section 469 shall apply, except that in applying 
section 469--
        (1) the adjustments of sections 56 and 57 shall apply,
        (2) the provisions of section 469(m) (relating to phase-in of 
    disallowance) shall not apply, and
        (3) in lieu of applying section 469(j)(7), the passive activity 
    loss of a taxpayer shall be computed without regard to qualified 
    housing interest (as defined in section 56(e)).

(c) Special rules

    For purposes of this section--

              (1) Special rule for insolvent taxpayers

        (A) In general

            The amount of losses to which subsection (a) or (b) applies 
        shall be reduced by the amount (if any) by which the taxpayer is 
        insolvent as of the close of the taxable year.

        (B) Insolvent

            For purposes of this paragraph, the term ``insolvent'' means 
        the excess of liabilities over the fair market value of assets.

      (2) Loss allowed for year of disposition of farm shelter 
                                  activity

        If the taxpayer disposes of his entire interest in any tax 
    shelter farm activity during any taxable year, the amount of the 
    loss attributable to such activity (determined after carryovers 
    under subsection (a)(1)(B)) shall (to the extent otherwise 
    allowable) be allowed for such taxable year in computing alternative 
    minimum taxable income and not treated as a loss from a tax shelter 
    farm activity.

(Added Pub. L. 99-514, title VII, Sec. 701(a), Oct. 22, 1986, 100 Stat. 
2335; amended Pub. L. 100-203, title X, Sec. 10212(b), Dec. 22, 1987, 
101 Stat. 1330-406; Pub. L. 100-647, title I, Sec. 1007(d), Nov. 10, 
1988, 102 Stat. 3432.)


                            Prior Provisions

    A prior section 58, added Pub. L. 91-172, title III, Sec. 301(a), 
Dec. 30, 1969, 83 Stat. 583; amended Pub. L. 92-178, title III, 
Sec. 308(a), Dec. 10, 1971, 85 Stat. 524; Pub. L. 94-455, title III, 
Sec. 301(d), title XIX, Secs. 1901(b)(40), 1906(b)(13)(A), Oct. 4, 1976, 
90 Stat. 1553, 1803, 1834; Pub. L. 95-600, title IV, Secs. 421(c), 
423(a), title VII, Sec. 701(b)(2), Nov. 6, 1978, 92 Stat. 2875, 2877, 
2898; Pub. L. 96-222, title I, Sec. 107(a)(1)(C), Apr. 1, 1980, 94 Stat. 
222; Pub. L. 97-248, title II, Sec. 201(c)(1), Sec. 201(d)(3), formerly 
Sec. 201(c)(3), Sept. 3, 1982, 96 Stat. 417, 419, renumbered 
Sec. 201(d)(3), Pub. L. 97-448, title III, Sec. 306(a)(1)(A)(i), Jan. 
12, 1983, 96 Stat. 2400; Pub. L. 97-354, Secs. 3(c), 5(a)(16), Oct. 19, 
1982, 96 Stat. 1688, 1693; Pub. L. 97-448, title I, Sec. 102(b)(2), Jan. 
12, 1983, 96 Stat. 2369; Pub. L. 98-369, div. A, title VII, 
Sec. 711(a)(2), (3)(B), July 18, 1984, 98 Stat. 942; Pub. L. 99-514, 
title XVIII, Sec. 1875(a), Oct. 22, 1986, 100 Stat. 2894, related to 
rules for application of minimum tax for tax preferences, prior to the 
general revision of this part by Pub. L. 99-514, Sec. 701(a).


                               Amendments

    1988--Subsec. (a)(2). Pub. L. 100-647, Sec. 1007(d)(1), struck out 
``(as modified by section 461(i)(4)(A))'' after ``section 464(c)'' in 
subpar. (A) and substituted ``section 469(c)'' for ``section 469(d), 
without regard to paragraph (1)(B) thereof'' in subpar. (B).
    Subsec. (a)(3). Pub. L. 100-647, Sec. 1007(d)(2), substituted 
``469(j)(2)'' for ``469(g)(1)(C)''.
    Subsec. (a)(4). Pub. L. 100-647, Sec. 1007(d)(3), added par. (4).
    Subsec. (b). Pub. L. 100-647, Sec. 1007(d)(4), added pars. (1) to 
(3) and struck out former pars. (1) to (3) which read as follows:
    ``(1) the adjustments of section 56 shall apply,
    ``(2) any deduction to the extent such deduction is an item of tax 
preference under section 57(a) shall not be taken into account, and
    ``(3) the provisions of section 469(m) (relating to phase-in of 
disallowance) shall not apply.''
    1987--Subsec. (b)(3). Pub. L. 100-203 substituted ``section 469(m)'' 
for ``section 469(l)''.


                    Effective Date of 1988 Amendment

    Amendment by Pub. L. 100-647 effective, except as otherwise 
provided, as if included in the provision of the Tax Reform Act of 1986, 
Pub. L. 99-514, to which such amendment relates, see section 1019(a) of 
Pub. L. 100-647, set out as a note under section 1 of this title.


                    Effective Date of 1987 Amendment

    Section 10212(c) of Pub. L. 100-203 provided that: ``The amendments 
made by this section [amending this section and sections 163 and 469 of 
this title] shall take effect as if included in the amendments made by 
section 501 of the Tax Reform Act of 1986 [section 501 of Pub. L. 99-
514, see section 501(c) of Pub. L. 99-514, set out as an Effective Date 
note under section 469 of this title].''


                             Effective Date

    Section applicable to taxable years beginning after Dec. 31, 1986, 
with certain exceptions and qualifications, see section 701(f) of Pub. 
L. 99-514, set out as a note under section 55 of this title.


                      Applicability of 1986 Repeal

    Pub. L. 101-239, title VII, Sec. 7811(d)(1)(B), Dec. 19, 1989, 103 
Stat. 2408, provided that: ``The repeal of section 58(h) of the Internal 
Revenue Code of 1954 by the Tax Reform Act of 1986 [Pub. L. 99-514] 
shall be effective only with respect to items of tax preference arising 
in taxable years beginning after December 31, 1986.''


  Applicability of Certain Amendments by Pub. L. 99-514 in Relation to 
                   Treaty Obligations of United States

    For applicability of amendment by section 701(a) of Pub. L. 99-514 
[enacting this section] notwithstanding any treaty obligation of the 
United States in effect on Oct. 22, 1986, with provision that for such 
purposes any amendment by title I of Pub. L. 100-647 be treated as if it 
had been included in the provision of Pub. L. 99-514 to which such 
amendment relates, see section 1012(aa)(2), (4) of Pub. L. 100-647, set 
out as a note under section 861 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 55, 56, 59, 772 of this 
title.
