26 USC § 58 - Denial of certain losses | Title 26 - Internal Revenue Code | U.S. Code

USCPrelim is a preliminary release and may be subject to further revision before it is released again as a final version.

Current through Pub. L. 112-143, except 112-141. (See Public Laws for the current Congress.)

(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.

prev | next

(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.

Source

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

Prior Provisions

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

Amendments

1988—Subsec. (a)(2). Pub. L. 100–647, § 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, § 1007(d)(2), substituted “469(j)(2)” for “469(g)(1)(C)”.

Subsec. (a)(4). Pub. L. 100–647, § 1007(d)(3), added par. (4).

Subsec. (b). Pub. L. 100–647, § 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. 100–203substituted “section 469 (m)” for “section 469 (l)”.

Effective Date of 1988 Amendment

Amendment by Pub. L. 100–647effective, 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) ofPub. L. 100–647, set out as a note under section 1 of this title.

Effective Date of 1987 Amendment

Section 10212(c) ofPub. L. 100–203provided 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 ofPub. L. 99–514, see section 501(c) ofPub. 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) ofPub. L. 99–514, set out as a note under section 55 of this title.

Applicability of 1986 Repeal

Pub. L. 101–239, title VII, § 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) ofPub. 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. 100–647be treated as if it had been included in the provision of Pub. L. 99–514to which such amendment relates, see section 1012(aa)(2), (4) ofPub. L. 100–647, set out as a note under section 861 of this title.

The table below lists the classification updates, since Jan. 3, 2012, for this section. Updates to a broader range of sections may be found at the update page for containing chapter, title, etc.

The most recent Classification Table update that we have noticed was Thursday, March 28, 2013

An empty table indicates that we see no relevant changes listed in the classification tables. If you suspect that our system may be missing something, please double-check with the Office of the Law Revision Counsel.

How To Use

Multiple entries for a section are listed most recent first, within the section.

The Session Year indicates which session of Congress was responsible for the changes classified. The Congress number forms the first part of the Public Law number; each Congress has two sessions.

Abbreviations used in the Description of Change column:

An empty field implies a standard amendment.
"new" means a new section or new note, or all new text of an existing section or note.
"nt" means note.
"nt [tbl]" means note [table].
"prec" means preceding.
"fr" means a transfer from another section.
"to" means a transfer to another section.
"omitted" means the section is omitted.
"repealed" means the section is repealed.
"nt ed change" and "ed change" - See the Editorial Classification Change Table [pdf].

The Public Law field is linked to the development of the law in the Thomas system at the Library of Congress.

The Statutes at Large field is linked to the text of the law, in the context of its volume of the Statutes at Large, at the Government Printing Office. Please note that it takes a while for these pages to get posted, so for very recent legislation, you need to look at the "enrolled" version at the Thomas site.

The Statutes at Large references have been rendered in the format used as page numbers in the Public Law web pages to which we link, to facilitate copy-paste into browser "find on this (web) page" tools. We are still working on a more direct link facility.

For serious comparison work, we suggest copying all or a portion of the Public Law text into your favorite text editor, for convenient content traversal and window control.

Sections with change type "new" are a special case, still under development. All are now listed, at the title level only.

You will find that occassionally a specific update you notice in a Public Law listed in a classification table will already have made it into the Code. We assume this is an artifact of the LRC edit process. The LII does not edit the LRC content.

top

General Reference

Refer to the LRC (Law Revision Council) for explanations about the US Code from the folks who put it all together.

You can look for information about what it is and is not, which titles are positive law, the schedule of Supplements, etc. Under download you can find the source data we use here (GPO locator files), as well as, PDF files that look just like the paper books (these may be rather large).

Refer to the Thomas site for changes that have not yet made it into the classification tables.

26 USC	Description of Change	Session Year	Public Law	Statutes at Large

26 USC § 58 - Denial of certain losses

U.S. Code Toolbox

Law about... Articles from Wex

Find a Lawyer

Get Involved