Tax Reform Act of 1976

[AI summary unavailable — showing source text] Tax Reform Act - Title I: Limitation on Artificial Losses - Restricts the extent to which losses arising from accelerated deductions under the Internal Revenue Code on real property can be used currently to offset income unrelated to real estate. Places accelerated deductions, to the extent that the deductions exceed the taxpayer's net related income from real property, in a deferred deduction account for use in a later year. Defines "net related income" as gross income from real property less the ordinary deductions attributable to real property (deductions other than the accelerated deductions). Stipulates that the limitation does not apply to true economic losses which continue to be deductible currently. States that the accelerated deductions which are subject to this limitation are the deductions for interest and taxes during the construction period, and accelerated depreciation in excess of straight line depreciation. Applies the limitation on artificial losses (LAL) to commercial and residential property where the construction begins after December 31, 1975. Delays the application of LAL to residential property if specified conditions are met. Applies LAL to farm operations …