Replies

SEC. 106. MODIFICATIONS TO ENCOURAGE CONTRIBUTIONS OF CAPITAL GAIN REAL PROPERTY MADE FOR CONSERVATION PURPOSES.

(a) IN GENERAL- Section 170(h) (relating to qualified conservation contribution) is amended by adding at the end the following new paragraph:

`(7) ADDITIONAL INCENTIVES FOR QUALIFIED CONSERVATION CONTRIBUTIONS-

`(A) IN GENERAL- In the case of any qualified conservation contribution (as defined in paragraph (1)) made by an individual--

`(i) subparagraph (C) of subsection (b)(1) shall not apply,

`(ii) except as provided in subparagraph (B)(i), subsections (b)(1)(A) and (d)(1) shall be applied separately with respect to such contributions by treating references to 50 percent of the taxpayer's contribution base as references to the amount of such base reduced by the amount of other contributions allowable under subsection (b)(1)(A), and

`(iii) subparagraph (A) of subsection (d)(1) shall be applied--

`(I) by substituting `15 succeeding taxable years' for `5 succeeding taxable years', and

`(II) by applying clause (ii) to each of the 15 succeeding taxable years.

`(B) SPECIAL RULES FOR ELIGIBLE FARMERS AND RANCHERS-

`(i) IN GENERAL- In the case of any such contributions made by an eligible farmer or rancher--

`(I) if the taxpayer is an individual, subsections (b)(1)(A) and (d)(1) shall be applied separately with respect to such contributions by substituting `the taxpayer's contribution base reduced by the amount of other contributions allowable under subsection (b)(1)(A)' for `50 percent of the taxpayer's contribution base' each place it appears, and

`(II) if the taxpayer is a corporation, subsections (b)(2) and (d)(2) shall be applied separately with respect to such contributions, subsection (b)(2) shall be applied with respect to such contributions as if such subsection did not contain the words `10 percent of' and as if subparagraph (A) thereof read `the deduction under this section for qualified conservation contributions', and rules similar to the rules of subparagraph (A)(iii) shall apply for purposes of subsection (d)(2).

`(ii) DEFINITION- For purposes of clause (i), the term `eligible farmer or rancher' means a taxpayer whose gross income from the trade or business of farming (within the meaning of section 2032A(e)(5)) is at least 51 percent of the taxpayer's gross income for the taxable year, and, in the case of a C corporation, the stock of which is not publicly traded on a recognized exchange.'.

(b) EFFECTIVE DATE- The amendment made by this section shall apply to contributions made after the date of the enactment of this Act.

SEC. 107. EXCLUSION OF 25 PERCENT OF GAIN ON SALES OR EXCHANGES OF LAND OR WATER INTERESTS TO ELIGIBLE ENTITIES FOR CONSERVATION PURPOSES.

(a) IN GENERAL- Part III of subchapter B of chapter 1 (relating to items specifically excluded from gross income) is amended by inserting after section 121 the following new section: