686 



allowed with respect to the portion of the adjusted 

 basis which is not the amortizable basis. 



(h) Repealed. Pub. L. 92-178, title I, §104(0(2) Dec 

 10. 1971, 85 Stat. 502. WW, uec. 



(i) Life tenant and remainderman. 



In the case of property held by one person for life 

 with remainder to another person, the deduction 

 under this section shall be computed as if the life 

 tenant were the absolute owner of the property and 

 shall be allowable to the life tenant. 



(j) Cross reference. 



.hf °Hi '""'.''' '"H "'"• "'""' '" "•""''•' K»'" derived from 

 the d,spo8,l,on of property the adjusted has,, of whichT 



determined with regard to this section, see section 1215. 



(As amended Pub. L. 92-178, title I. § 104(f)(2), 

 Dec. 10, 1971, 85 Stat. 502; Pub. L. 94-455, § 2112 

 (b), (c), Oct. 4, 1976, 90 Stat. 1906.) 



Amendments 



1976— Sulbsec. (d)(1). Pub. L. 94-^55, 12112(b), 

 substituted "January 1, 1976" for "January 1, 1969"; 

 added ", or preventing the creation or emission of" 

 following "storing"; and adding subparagraph (c). 



Subsec. (d)(4). Pub. L. 94-455, § 2112(c), revised 

 this subsection. 



1971— Subsec. (h) Pub. L, 92-178 struck out subsec. (h) 

 provision that Investment credit not be allowed, now 

 covered In section 48(a) (8) of this title. 



***** 

 § 175. Soil and water conservation expenditures. 

 (.a) In general. 



A taxpayer engaged in the business of farming 

 may treat expenditures which are paid or incurred 

 by him during the taxable year for the purpose of 

 soil or water conservation in respect of land used 

 in farming, or for the prevention of erosion of land 

 used in farming, as expenses which are not charge- 

 able to capital account. The expenditures so treated 

 shall be allowed as a deduction. 



(b) Limitation. 



The amount deductible under subsection (a' for 

 any taxable year shall not exceed 25 percent of the 

 gross income derived from farming during the tax- 

 able year. If for any taxable year the total of the 

 expenditures treated as expenses which are not 

 chargeable to capital account exceeds 25 percent of 

 the gross income derived from farming during the 

 taxable year, such excess shall be deductible for 

 succeeding taxable years in order of time; but the 

 amount deductible under this section for any one 

 such succeeding taxable year t including the expendi- 

 tures actually paid or incurred during the taxable 

 yeari shall not exceed 25 percent of the gross income 

 derived from farming during the taxable year. 



(c) Definitions. 



For purposes of subsection (ai — 



(1) The term "expenditures which are paid or 

 incurred by him during the taxable year for the 

 purpose of soil or water conservation in respect 

 of land used in farming, or for the prevention of 

 erosion of land used in farming" means expendi- 

 tures paid or incurred for the treatment or mov- 

 . ing of earth, including ibut not limited to' level- 

 ing, grading and terracing, contour furrowing. 



the construction, control, and protection of divei- 

 sion channels, drainage ditches, earthen dams, 

 watercourse.?, outlets, and ponds, the eradication 

 of brush, and the planting of windbreaks. Such 

 term does not include — 



lAi Hie purchase, construction. Installation, 

 or Iniprcvemeiu of .structures, appliances, or 

 facilities which are of a character which Is sub- 

 ject to the allowance for depreciation provided 

 In section 167, or 



IB' any amount paid or incurred which is 

 allowable as a deduction without regard to this 

 section. 

 Notwithstanding the preceding sentences, such 

 term also includes any amount, not otherwise al- 

 lowable as a deduction, paid or incurred to satisfy 

 any part of an assessment levied by a soil or water 

 conservation or drainage district to defray ex- 

 penditures made by such district (D which, If paid 

 or Incurred by the taxpayer, would without regard 

 to this sentence constitute expenditures deduct- 

 ible under this section, or ^IP for property of 

 a character subject to the allowance for deprecia- 

 tion provided In section 167 and used In the soil 

 or water conservation or drainage district's busi- 

 ness as such I to the extent that the taxpayer's 

 share of the assessment levied on the members of 

 the district for such property does not exceed 10 

 percent of such assessment i. 



(2) The term "land used In farming" means 

 land used i before or simultaneously with the ex- 

 penditures described in paragraph (1)) by the 

 taxpayer or his tenant for the production of 

 crops, fruits, or other agricultural products or for 

 the sustenance of livestock, 



(d) When metliod may be adopted. 



(1) Without con.seni, 



A taxpayer may. without tlie consent of the 

 Secretary or his delegate, adopt the method pro- 

 vided In this section for his first taxable year— 

 (A> which begins after December 31. 1953, 

 and ends after August 16, 1954, and 



(Bi fur which expenditures described in sub- 

 section (a> are paid or incurred. 



(2) With consent, 



A taxpayer may, with the consent of the Secre- 

 tary or his delegate, adopt at any time the method 

 provided In this section. 



(e) Scope, 



The method adopted under this section shall apply 

 to all expenditures described In subsection (a) . The 

 method adopted shall be adhered to In computing 

 taxable Income for the taxable year and for all sub- 

 sequent taxable years unless, with the approval of 

 the Secretary or his delegate, a change to a different 

 method Is authorized with respect to part or all of 

 such expenditures, 



(f) RuleR applicable to a«iiesf<menti for depreciable 

 property. — 



(1) Amounts treated an paid or incurred over 9-yeBr 



period, 



In the case of an assessment levied to defray 



expenditures for property described In clause (11> 



of the last sentence of subsection (cui), if the 



