In addition, Montana State University researchers 

 have found that the agricultural tax laws "provide a 

 major economic incentive for investors who do not plan 

 to retain ownership of converted land to convert 

 rangeland to cropland" (i.e., sodbusting) . '-^ 



These researchers have suggested that various 

 features of the tax system should be altered to reduce 

 the tax incentives for such practices. One suggestion 

 is to exclude the allowance of deductions to offset 

 income earned from nonfarm sources.'-^ 



Similar Policies and Programs 



In recent years, attempts have been made at the 

 national and state level to restrict special tax 

 writeoffs for farm losses. 



The Wisconsin State Legislature recently enacted a 

 bill that: (1) restricts the amount of farm losses 

 that can be deducted from nonfarm income for state tax 

 purposes; and (2) excludes individuals from taking 

 accelerated depreciation on farm buildings and machinery 

 when annual nonfarm income exceeds $55,000 or gross farm 

 receipts exceed $155,000 a year. The tax writeoff 

 provisions of the Wisconsin law limit the farm loss 

 deduction based on a sliding scale that eliminates the 

 deduction for persons who earn $400,000 in nonfarm 

 income, but permits allowable losses for individuals 

 having lower off-farm incomes. The law exempts all 

 persons who have nonfarm income of $55,000 or less.' 



In 1985, U.S. Senator James Abdnor (R-South Dakota) 

 introduced a bill to limit to the national median family 

 income the amount of farm losses that could be deducted 



54 



