Section 24377(a) - Expenditures by Farmers for Fertilizer, Etc(1) In General. A taxpayer engaged in the business of farming may elect, for any income year beginning after December 31, 1960, to treat as deductible expenses those expenditures otherwise chargeable to capital account which are paid or incurred by it during the income year for the purchase or acquisition of fertilizer, lime, ground limestone, marl, or other materials to enrich, neutralize, or condition land used in farming, and those expenditures otherwise chargeable to capital account paid or incurred for the application of such items and materials to such land. No election is required to be made for those expenditures which are not capital in nature. Section 24377, Reg. 24377(b), and this regulation are not applicable to those expenses which are deductible under Section 24343 and the regulations thereunder or which are subject to the method described in Section 24369.(2) Land Used in Farming. For purposes of Section 24377(a) and of subsection (1) of this regulation, the term "land used in farming" means land used (before or simultaneously with the expenditures described in such section and such subsection) by the taxpayer or its tenant for the production of crops, fruits, or other agricultural products or for the sustenance of livestock. See Section 24377(b). Expenditures for the initial preparation of land never previously used for farming purposes by the taxpayer or its tenant (although chargeable to capital account) are not subject to the election. The principles stated in Regs. 24369(c) and 24369(d) are equally applicable under this regulation in determining whether the taxpayer is engaged in the business of farming and whether the land is used in farming.Cal. Code Regs. Tit. 18, § 24377(a)
1. New section filed 1-6-69; effective thirtieth day thereafter (Register 69, No. 2).[FN*]
This regulation is substantially the same as Section 26 CFR 1.180-2.1. New section filed 1-6-69; effective thirtieth day thereafter (Register 69, No. 2).