Summary: H.R.5564 — 100th Congress (1987-1988)All Information (Except Text)

There is one summary for H.R.5564. Bill summaries are authored by CRS.

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Introduced in House (10/21/1988)

Amends the Internal Revenue Code to exclude from gross income up to $350,000 (lifetime total) of capital gain from the transfer of property in complete or partial satisfaction of qualified farm indebtedness of a taxpayer: (1) whose modified gross income is below the relevant statewide median; (2) whose gross receipts for three of the preceding five years are at least 80 percent attributable to farming; and (3) whose equity in all property held after the transfer in question is less than either $25,000 or 150 percent of income tax liability.

Applies a comparable exclusion with respect to the discharge of qualified farm indebtedness of solvent farmers: (1) who meet the first two criteria listed above; (2) whose indebtedness both before and after the transfer equals at least 70 percent or more of equity; and (3) whose equity in all property after the discharge equals less than $100,000.

Permits both tax exclusions retroactively with respect to taxable years 1987 and thereafter.

Treats the estate and not the individual as the taxpayer with respect to the reduction of tax attributes in cases of bankruptcy relating to adjustment of the debts of family farmers (chapter 12 cases).

Treats the abandonment of property by a chapter 7 (liquidation) bankruptcy estate as a taxable transfer, thus placing any resulting tax liability with the estate rather than the individual debtor.