Tax Empowerment and Relief for Farmers and Fishermen (TERFF) Act - Amends the Internal Revenue Code to: (1) allow certain commercial farming and fishing businesses a tax deduction for cash contributions (up to 20 percent of taxable income) to a Farm, Fishing, and Ranch Risk Management Account (FFARRM Account); (2) exempt agricultural bonds from private activity bond volume caps; (3) allow individuals a tax deduction for charitable contributions of food (currently restricted to C corporations); (4) extend income averaging to fishermen (currently allowed for farmers) and exclude income averaging for farmers and fishermen from the computation of the alternative minimum tax; (5) modify cooperative marketing rules to include value-added processing involving animals; (6) permit farmer cooperatives to seek declaratory judgments with respect to their tax-exempt status; and (7) allow the allocation of the small ethanol tax credit amounts to patrons of tax-exempt cooperatives.
Amends the Code and title II (Old Age, Survivors and Disability Insurance) of the Social Security Act to exclude certain rental income and conservation reserve program payments from the self-employment tax.
Provides that dividends on the capital stock or other proprietary capital interests of tax-exempt cooperatives shall not reduce the net earnings of such cooperatives.
Modifies involuntary conversion rules to extend from two to four years the replacement period for livestock sold due to drought, flood, or other weather-related conditions.