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TITLE 26-INTERNAL REVENUE CODE subsec. (dH10) of this section] which begin after De- cember 31, 1975." Amendment of subsecs. (d)(4)(B), (C), (D). (f)(1), (g)(1) by section 1901(b)(3)(K), (31)(A), (B), (E) of Pub. L. 94-455 effective for taxable years beginning after Dec. 31, 1978, see section 1901(d) of Pub. L. 94- 455, set out as an Effective Date of 1976 Amendment note under section 2 of this title. Amendment of subsec. (b)(3) by section 1951(c)(2)(C) of Pub. L. 94-455 applicable to taxable years beginning after Dec. 31, 1976, see section 1951(d) of Pub. L. 94- 455, set out as an Effective Date of 1976 Amendment note under section 72 of this title. Amendment of subsec. (b)(3) by section 2122(b)(4) of Pub. L. 94-455 applicable to taxable years beginning after Dec. 31, 1976, and before Jan. 1, 1980, see section 2122(c) of Pub. L. 94-455, set out as an Effective Date of 1976 Amendment note under section 190 of this title. Amendment of subsec. (b)(3) by section 2124(a)(3)(D) of Pub. L. 94-455 applicable with respect to additions to capital accounts made after June 14, 1976 and before June 15, 1981, see section 2124(a)(4) of Pub. L. 94-455, set out as an Effective Date note under section 191 of this title. EmcTivE DATE OF 1975 Amnmerr Section 2(c) of Pub. L. 94-81 provided that: "(1) In general. "Except as provided in paragraph (2) the amend- ments made by this section [amending this section and section 1245 of this title] shall apply to dispositions after December 31, 1969, in taxable years ending after such date. "(2) Election for past transactions. "In the case of any disposition occurring before the date of the enactment of this Act [Aug. 9, 1975], the amendments made by this section shall apply only if the organization acquiring the property elects (in the manner provided by regulations prescribed by the Sec- retary of the Treasury or his delegate) within 1 year after the date of the enactment of this Act to have such amendments apply with respect to such proper- ty." Amendment by Pub. L. 93-625 applicable with re- spect to property placed in service after Dec. 31, 1973, see section 5(d) of Pub. L. 93-625, set out as an Effec- tive Date of 1975 Amendment note under section 167 of this title. EFFECTivE DATE OF 1971 AmNMENT Amendment of subsec. (b)(3) of this section by Pub. L. 92-178 applicable to taxable years ending after Dec. 31, 1971, see section 303(d) of Pub. L. 92-178, set out as an Effective Date of 1971 Amendment note under sec- tion 188 of this title. Er'zcTIv. DATE OF 1969 AmmzNT Amendment by section 521(b), (c), and (e) of Pub. L. 91-172 applicable with respect to taxable years ending after July 24, 1969, see section 521(g) of Pub. L. 91- 172, set out as an Effective Date of 1969 Amendment note under section 167 of this title. Amendment by section 704(b)(5) of Pub. L. 91-172 applicable to taxable years ending after Dec. 31, 1968, see section 704(c) of Pub. L. 91-172, set out as an Ef- fective Date note under section 169 of this title. Amendment by section 910(b) of Pub. L. 91-172 ap- plicable to approved dispositions of qualified housing projects after Oct. 9, 1969, see section 910(d) of Pub. L. 91-172, set out as an Effective Date note under section 1039 of this title. EFrECTIVE DATE Section 231(c) of Pub. L. 88-272 provided that: "The amendments made by this section [adding this section, and amending sections 170, 301, 312, 341, 453(d)(4), 751, and the analysis preceding section 1231 of this title] shall apply to dispositions after December 31, 1963, In taxable years ending after such date." SECTION RznnUMD TO IN Ormm SEcTIoNs This section is referred to in sections 57, 163, 167, 170, 189, 301, 312, 341, 453, 644, 751 of this title. § 1251, Gain from disposition of property used In farming where farm losses offset nonfarm Income (a) Circumstances under which section applies This section shall apply with respect to any taxable year only if- (1) there is a farm net loss for the taxable year, or (2) there is a balance in the excess deduc. tions account as of the close of the taxable year after applying subsection (b)(3)(A). (b) Excess deductions account (1) Requirement Each taxpayer subject to this section shall, for purposes of this section, establish and maintain an excess deductions account. (2) Additions to account (A) General rule There shall be added to the excess deduc- tions account for each taxable year an amount equal to the farm net loss. (B) Exceptions In the case of an individual (other than a trust) and, except as provided in this sub- paragraph, in the case of an electing small business corporation (as defined in section 1371(b)), subparagraph (A) shall apply for a taxable year- (1) only if the taxpayer's nonfarm ad- Justed gross income for such year exceeds $50,000, and (it) only to the extent the taxpayer's farm net loss for such year exceeds $25,000. This subparagraph shall not apply to an electing small business corporation for a taxable year if on any day of such year a shareholder of such corporation is an indi- vidual who, for his taxable year with which or within which the taxable year of the cor- poration ends, has a farm net loss or is a shareholder of another electing small busi- ness corporation which has a farm net loss for its taxable year ending within such tax- able year of the individual. For purposes of clause (I), in the case of an electing small business corporation the nonfarm adjusted gross income of the corporation shall be in- creased by the amount of the nonfarm ad- Justed gross income of that shareholder (on any day of the corporation's taxable year) who has the highest ambunt of all such shareholders of nonfarm adjusted gross income for his taxable year with which or within which the taxable year of the corpo- ration ends. (C) Married individuals In the case of a husband or wife who files a separate return, the amount specified in subparagraph (B)(i) shall be $25,000 in lieu of $50,000, and in subparagraph (B)(ii) shall be $12,500 in lieu of $25,000. This subpara- graph shall not apply if the spouse of the taxpayer does not have any nonfarm ad- Justed gross income for the taxable year. § 1251 Page 712