I.R.C. § 2032A(a) Value Based On Use Under Which Property Qualifies
I.R.C. § 2032A(a)(1) General Rule —
If—
I.R.C. § 2032A(a)(1)(A) —
the decedent was (at the time of his death) a citizen or resident of the United States,
and
I.R.C. § 2032A(a)(1)(B) —
the executor elects the application of this section and files the agreement referred
to in subsection (d)(2),
then, for purposes of this chapter, the value of qualified real property shall be
its value for the use under which it qualifies, under subsection (b), as qualified real property.
I.R.C. § 2032A(a)(2) Limitation On Aggregate Reduction In Fair Market Value —
The aggregate decrease in the value of qualified real property taken into account
for purposes of this chapter which results from the application of paragraph (1) with respect to any decedent shall not exceed $750,000.
I.R.C. § 2032A(a)(3) Inflation Adjustment —
In the case of estates of decedents dying in a calendar year after 1998, the $750,000
amount contained in paragraph (2) shall be increased by an amount equal to—
I.R.C. § 2032A(a)(3)(A) —
$750,000, multiplied by
If any amount as adjusted under the preceding sentence
is not a multiple of $10,000, such amount shall be rounded to the next lowest multiple
of $10,000.
I.R.C. § 2032A(b) Qualified Real Property
I.R.C. § 2032A(b)(1) In General —
For purposes of this section, the term “qualified real property” means
real property located in the United States which was acquired from or passed from
the decedent to a qualified heir of the decedent and which, on the date of the decedent's
death, was being used for a qualified use by the decedent or a member of the decedent's
family, but only if—
I.R.C. § 2032A(b)(1)(A) —
50 percent or more of the adjusted value of the gross estate consists of the adjusted
value of real or personal property which—
I.R.C. § 2032A(b)(1)(A)(i) —
on the date of the decedent's death, was being used for a qualified use by the decedent
or a member of the decedent's family, and
I.R.C. § 2032A(b)(1)(A)(ii) —
was acquired from or passed from the decedent to a qualified heir of the decedent.
I.R.C. § 2032A(b)(1)(B) —
25 percent or more of the adjusted value of the gross estate consists of the adjusted
value of real property which meets the requirements of subparagraphs (A)(ii) and (C),
I.R.C. § 2032A(b)(1)(C) —
during the 8-year period ending on the date of the decedent's death there have been
periods aggregating 5 years or more during which—
I.R.C. § 2032A(b)(1)(C)(i) —
such real property was owned by the decedent or a member of the decedent's family
and used for a qualified use by the decedent or a member of the decedent's family,
and
I.R.C. § 2032A(b)(1)(C)(ii) —
there was material participation by the decedent or a member of the decedent's family
in the operation of the farm or other business, and
I.R.C. § 2032A(b)(1)(D) —
such real property is designated in the agreement referred to in subsection (d)(2).
I.R.C. § 2032A(b)(2) Qualified Use —
For purposes of this section, the term “qualified use"
means the devotion of the property to any of the following:
I.R.C. § 2032A(b)(2)(A) —
use as a farm for farming purposes, or
I.R.C. § 2032A(b)(2)(B) —
use in a trade or business other than the trade or business of farming.
I.R.C. § 2032A(b)(3) Adjusted Value —
For purposes of paragraph (1), the term “adjusted value” means—
I.R.C. § 2032A(b)(3)(A) —
in the case of the gross estate, the value of the gross estate for purposes of this
chapter (determined without regard to this section), reduced by any amounts allowable
as a deduction under paragraph (4) of section 2053(a), or
I.R.C. § 2032A(b)(4) Decedents Who Are Retired Or Disabled
I.R.C. § 2032A(b)(4)(A) In General —
If, on the date of the decedent's death, the requirements of paragraph (1)(C)(ii) with respect to the decedent for any property are not met, and the decedent—
I.R.C. § 2032A(b)(4)(A)(i) —
was receiving old-age benefits under title II of the Social Security Act for a continuous
period ending on such date, or
I.R.C. § 2032A(b)(4)(A)(ii) —
was disabled for a continuous period ending on such date,
then paragraph (1)(C)(ii) shall be applied with respect to such property by substituting “the date on
which the longer of such continuous periods began” for “the date of the
decedent's death” in paragraph (1)(C).
I.R.C. § 2032A(b)(4)(B) Disabled Defined —
For purposes of subparagraph (A), an individual shall be disabled if such individual has a mental or physical impairment
which renders him unable to materially participate in the operation of the farm or
other business.
I.R.C. § 2032A(b)(4)(C) Coordination With Recapture —
For purposes of subsection (c)(6)(B)(i), if the requirements of paragraph (1)(C)(ii) are met with respect to any decedent by reason of subparagraph (A), the period ending on the date on which the continuous period taken into account
under subparagraph (A) began shall be treated as the period immediately before the decedent's death.
I.R.C. § 2032A(b)(5) Special Rules For Surviving Spouses
I.R.C. § 2032A(b)(5)(A) In General —
If property is qualified real property with respect to a decedent (hereinafter in
this paragraph referred to as the “first decedent”) and such property
was acquired from or passed from the first decedent to the surviving spouse of the
first decedent, for purposes of applying this subsection and subsection (c) in the case of the estate of such surviving spouse, active management of the farm
or other business by the surviving spouse shall be treated as material participation
by such surviving spouse in the operation of such farm or business.
I.R.C. § 2032A(b)(5)(B) Special Rule —
For the purposes of subparagraph (A), the determination of whether property is qualified real property with respect to
the first decedent shall be made without regard to subparagraph (D) of paragraph
(1) and without regard to whether an election under this section was made.
I.R.C. § 2032A(b)(5)(C) Coordination With Paragraph (4) —
In any case in which to do so will enable the requirements of paragraph (1)(C)(ii)
to be met with respect to the surviving spouse, this subsection and subsection (c) shall be applied by taking into account any application of paragraph (4).
I.R.C. § 2032A(c) Tax Treatment Of Dispositions And Failures To Use For Qualified Use
I.R.C. § 2032A(c)(1) Imposition Of Additional Estate Tax —
If, within 10 years after the decedent's death and before the death of the qualified
heir—
I.R.C. § 2032A(c)(1)(A) —
the qualified heir disposes of any interest in qualified real property (other than
by a disposition to a member of his family), or
I.R.C. § 2032A(c)(1)(B) —
the qualified heir ceases to use for the qualified use the qualified real property
which was acquired
(or passed) from the decedent, then, there is hereby imposed an additional estate
tax.
I.R.C. § 2032A(c)(2) Amount Of Additional Tax
I.R.C. § 2032A(c)(2)(A) In General —
The amount of the additional tax imposed by paragraph (1) with respect to any
interest shall be the amount equal to the lesser of—
I.R.C. § 2032A(c)(2)(A)(i) —
the adjusted tax difference attributable to such interest, or
I.R.C. § 2032A(c)(2)(A)(ii) —
the excess of the amount realized with respect to the interest (or, in any case other
than a sale or exchange at arm's length, the fair market value of the interest)
over the value of the interest determined under subsection (a).
I.R.C. § 2032A(c)(2)(B) Adjusted Tax Difference Attributable To Interest —
For purposes of subparagraph (A), the adjusted tax difference attributable to an
interest is the amount which bears the same ratio to the adjusted tax difference
with respect to the estate (determined under subparagraph (C)) as—
I.R.C. § 2032A(c)(2)(B)(i) —
the excess of the value of such interest for purposes of this chapter (determined
without regard to subsection (a))
over the value of such interest determined under subsection (a), bears to
I.R.C. § 2032A(c)(2)(B)(ii) —
a similar excess determined for all qualified real property.
I.R.C. § 2032A(c)(2)(C) Adjusted Tax Difference With Respect To The Estate —
For purposes of subparagraph (B), the term “adjusted tax difference with respect
to the estate” means the excess of what would have been the estate tax liability
but for subsection (a) over the estate tax liability. For purposes of this subparagraph, the term “estate
tax liability"
means the tax imposed by section 2001 reduced by the credits allowable against such tax.
I.R.C. § 2032A(c)(2)(D) Partial Dispositions —
For purposes of this paragraph, where the qualified heir disposes of a portion of
the interest acquired by (or passing to) such heir (or a predecessor qualified heir)
or there is a cessation of use of such a portion—
I.R.C. § 2032A(c)(2)(D)(i) —
the value determined under subsection (a) taken into account under subparagraph (A)(ii) with respect to such portion shall
be its pro rata share of such value of such interest, and
I.R.C. § 2032A(c)(2)(D)(ii) —
the adjusted tax difference attributable to the interest taken into account with
respect to the transaction involving the second or any succeeding portion shall be
reduced by the amount of the tax imposed by this subsection with respect to all prior
transactions involving portions of such interest.
I.R.C. § 2032A(c)(2)(E) Special Rule For Disposition Of Timber —
In the case of qualified woodland to which an election under subsection (e)(13)(A) applies, if the qualified heir disposes of (or severs) any standing timber on such
qualified woodland—
I.R.C. § 2032A(c)(2)(E)(i) —
such disposition (or severance)
shall be treated as a disposition of a portion of the interest of the qualified heir
in such property, and
I.R.C. § 2032A(c)(2)(E)(ii) —
the amount of the additional tax imposed by paragraph (1) with respect to such disposition
shall be an amount equal to the lesser of—
I.R.C. § 2032A(c)(2)(E)(ii)(I) —
the amount realized on such disposition
(or, in any case other than a sale or exchange at arm's length, the fair market value
of the portion of the interest disposed or severed), or
I.R.C. § 2032A(c)(2)(E)(ii)(II) —
the amount of additional tax determined under this paragraph (without regard to this
subparagraph) if the entire interest of the qualified heir in the qualified woodland
had been disposed of, less the sum of the amount of the additional tax imposed with
respect to all prior transactions involving such woodland to which this subparagraph
applied.
For purposes of the preceding sentence, the disposition
of a right to sever shall be treated as the disposition of the standing
timber. The amount of additional tax imposed under paragraph (1)
in any case in which a qualified heir disposes of his entire interest in the qualified
woodland shall be reduced by any amount determined under this subparagraph with respect
to such woodland.
I.R.C. § 2032A(c)(3) Only 1 Additional Tax Imposed With Respect To Any 1 Portion —
In the case of an interest acquired from (or passing from) any decedent, if subparagraph
(A) or (B) of paragraph (1) applies to any portion of an interest, subparagraph (B)
or (A), as the case may be, of paragraph (1) shall not apply with respect to the
same portion of such interest.
I.R.C. § 2032A(c)(4) Due Date —
The additional tax imposed by this subsection shall become due and payable on the
day which is 6 months after the date of the disposition or cessation referred to
in paragraph (1).
I.R.C. § 2032A(c)(5) Liability For Tax; Furnishing Of Bond —
The qualified heir shall be personally liable for the additional tax imposed by
this subsection with respect to his interest unless the heir has furnished bond which
meets the requirements of subsection (e)(11).
I.R.C. § 2032A(c)(6) Cessation Of Qualified Use —
For purposes of paragraph (1)(B), real property shall cease to be used for the qualified
use if—
I.R.C. § 2032A(c)(6)(A) —
such property ceases to be used for the qualified use set forth in subparagraph (A) or (B) of subsection (b)(2) under which the
property qualified under subsection (b), or
I.R.C. § 2032A(c)(6)(B) —
during any period of 8 years ending after the date of the decedent's death and before
the date of the death of the qualified heir, there had been periods aggregating more
than 3 years during which—
I.R.C. § 2032A(c)(6)(B)(i) —
in the case of periods during which the property was held by the decedent, there
was no material participation by the decedent or any member of his family in the
operation of the farm or other business, and
I.R.C. § 2032A(c)(6)(B)(ii) —
in the case of periods during which the property was held by any qualified heir,
there was no material participation by such qualified heir or any member of his family
in the operation of the farm or other business.
I.R.C. § 2032A(c)(7) Special Rules
I.R.C. § 2032A(c)(7)(A) No Tax If Use Begins Within 2 Years —
If the date on which the qualified heir begins to use the qualified real property
(hereinafter in this subparagraph referred to as the commencement date) is before
the date 2 years after the decedent's death—
I.R.C. § 2032A(c)(7)(A)(i) —
no tax shall be imposed under paragraph
(1) by reason of the failure by the qualified heir to so use such property before
the commencement date, and
I.R.C. § 2032A(c)(7)(A)(ii) —
the 10-year period under paragraph
(1) shall be extended by the period after the decedent's death and before the commencement
date.
I.R.C. § 2032A(c)(7)(B) Active Management By Eligible Qualified Heir Treated As Material Participation —
For purposes of paragraph (6)(B)(ii), the active management of a farm or other business
by—
I.R.C. § 2032A(c)(7)(B)(i) —
an eligible qualified heir, or
I.R.C. § 2032A(c)(7)(B)(ii) —
a fiduciary of an eligible qualified heir described in clause (ii) or (iii) of subparagraph
(C),
shall be treated as material participation by such eligible qualified heir in the
operation of such farm or business. In the case of an eligible qualified heir described
in
clause (ii), (iii), or (iv) of subparagraph (C), the preceding sentence
shall apply only during periods during which such heir meets the
requirements of such clause.
I.R.C. § 2032A(c)(7)(C) Eligible Qualified Heir —
For purposes of this paragraph, the term “eligible qualified heir” means
a qualified heir who—
I.R.C. § 2032A(c)(7)(C)(i) —
is the surviving spouse of the decedent,
I.R.C. § 2032A(c)(7)(C)(ii) —
has not attained the age of 21,
I.R.C. § 2032A(c)(7)(C)(iii) —
is disabled (within the meaning of subsection (b)(4)(B)), or
I.R.C. § 2032A(c)(7)(C)(iv) —
is a student.
I.R.C. § 2032A(c)(7)(D) Student —
For purposes of subparagraph (C), an individual shall be treated as a student with
respect to periods during any calendar year if (and only if) such individual is a
student (within the meaning of section 152(f)(2))
for such calendar year.
I.R.C. § 2032A(c)(7)(E) Certain Rents Treated As Qualified Use —
For purposes of this subsection, a surviving spouse or lineal descendant of the
decedent shall not be treated as failing to use qualified real property in a qualified
use solely because such spouse or descendant rents such property to a member of the
family of such spouse or descendant on a net cash basis. For purposes of the preceding
sentence, a legally adopted child of an individual shall be treated as the child
of such individual by blood.
I.R.C. § 2032A(c)(8) Qualified Conservation Contribution Is Not A Disposition —
A qualified conservation contribution (as defined in section 170(h))
by gift or otherwise shall not be deemed a disposition under subsection
(c)(1)(A).
I.R.C. § 2032A(d) Election; Agreement
I.R.C. § 2032A(d)(1) Election —
The election under this section shall be made on the return of the tax imposed by
section 2001. Such election shall be made in such manner as the Secretary shall by regulations
prescribe. Such an election, once made, shall be irrevocable.
I.R.C. § 2032A(d)(2) Agreement —
The agreement referred to in this paragraph is a written agreement signed by each
person in being who has an interest (whether or not in possession) in any property
designated in such agreement consenting to the application of subsection (c) with respect to such property.
I.R.C. § 2032A(d)(3) Modification Of Election And Agreement To Be Permitted —
The Secretary shall prescribe procedures which provide that in any case in which
the executor makes an election under paragraph (1) (and submits the
agreement referred to in paragraph (2)) within the time prescribed
therefor, but—
I.R.C. § 2032A(d)(3)(A) —
the notice of election, as filed, does not contain all required information, or
I.R.C. § 2032A(d)(3)(B) —
signatures of 1 or more persons required to enter into the agreement described in
paragraph (2) are not included on the agreement as filed, or the agreement does not contain all
required information,
the executor will have a reasonable period of time (not
exceeding 90 days) after notification of such failures to provide such information
or signatures.
I.R.C. § 2032A(e) Definitions; Special Rules —
For purposes of this section—
I.R.C. § 2032A(e)(1) Qualified Heir —
The term “qualified heir” means, with respect to any property, a member
of the decedent's family who acquired such property
(or to whom such property passed) from the decedent. If a qualified heir disposes
of any interest in qualified real property to any member of his family, such member
shall thereafter be treated as the qualified heir with respect to such interest.
I.R.C. § 2032A(e)(2) Member Of Family —
The term “member of the family” means, with respect to any individual,
only—
I.R.C. § 2032A(e)(2)(A) —
an ancestor of such individual,
I.R.C. § 2032A(e)(2)(B) —
the spouse of such individual,
I.R.C. § 2032A(e)(2)(C) —
a lineal descendant of such individual, of such individual's spouse, or of a parent
of such individual, or
I.R.C. § 2032A(e)(2)(D) —
the spouse of any lineal descendant described in subparagraph (C).
For purposes of the preceding sentence, a legally adopted child of an individual
shall be treated as the child of such individual by blood.
I.R.C. § 2032A(e)(3) Certain Real Property Included —
In the case of real property which meets the requirements of subparagraph (C)
of subsection (b)(1), residential buildings and related improvements on such real property occupied on
a regular basis by the owner or lessee of such real property or by persons employed
by such owner or lessee for the purpose of operating or maintaining such real property,
and roads, buildings, and other structures and improvements functionally related
to the qualified use shall be treated as real property devoted to the qualified
use.
I.R.C. § 2032A(e)(4) Farm —
The term “farm” includes stock, dairy, poultry, fruit, furbearing animal,
and truck farms, plantations, ranches, nurseries, ranges, greenhouses or other similar
structures used primarily for the raising of agricultural or horticultural commodities,
and orchards and woodlands.
I.R.C. § 2032A(e)(5) Farming Purposes —
The term “farming purposes” means—
I.R.C. § 2032A(e)(5)(A) —
cultivating the soil or raising or harvesting any agricultural or horticultural commodity
(including the raising, shearing, feeding, caring for, training, and management of
animals) on a farm;
I.R.C. § 2032A(e)(5)(B) —
handling, drying, packing, grading, or storing on a farm any agricultural or horticultural
commodity in its unmanufactured state, but only if the owner, tenant, or operator
of the farm regularly produces more than one-half of the commodity so treated; and
I.R.C. § 2032A(e)(5)(C)
I.R.C. § 2032A(e)(5)(C)(i) —
the planting, cultivating, caring for, or cutting of trees, or
I.R.C. § 2032A(e)(5)(C)(ii) —
the preparation (other than milling)
of trees for market.
I.R.C. § 2032A(e)(6) Material Participation —
I.R.C. § 2032A(e)(7) Method Of Valuing Farms
I.R.C. § 2032A(e)(7)(A) In General —
Except as provided in subparagraph (B), the value of a farm for farming purposes
shall be determined by dividing—
I.R.C. § 2032A(e)(7)(A)(i) —
the excess of the average annual gross cash rental for comparable land used for farming
purposes and located in the locality of such farm over the average annual State and
local real estate taxes for such comparable land, by
I.R.C. § 2032A(e)(7)(A)(ii) —
the average annual effective interest rate for all new Federal Land Bank loans.
For purposes of the preceding sentence, each average
annual computation shall be made on the basis of the 5 most recent
calendar years ending before the date of the decedent's death.
I.R.C. § 2032A(e)(7)(B) Value Based On Net Share Rental In Certain Cases
I.R.C. § 2032A(e)(7)(B)(i) In General —
If there is no comparable land from which the average annual gross cash rental may
be determined but there is comparable land from which the average net share rental
may be determined, subparagraph
(A)(i) shall be applied by substituting “average annual net share rental”
for “average annual gross cash rental”.
I.R.C. § 2032A(e)(7)(B)(ii) Net Share Rental —
For purposes of this paragraph, the term “net share rental” means the
excess of—
I.R.C. § 2032A(e)(7)(B)(ii)(I) —
the value of the produce received by the lessor of the land on which such produce
is grown, over
I.R.C. § 2032A(e)(7)(B)(ii)(II) —
the cash operating expenses of growing such produce which, under the lease, are paid
by the lessor.
I.R.C. § 2032A(e)(7)(C) Exception —
The formula provided by subparagraph (A) shall not be used—
I.R.C. § 2032A(e)(7)(C)(i) —
where it is established that there is no comparable land from which the average annual
gross cash rental may be determined, or
I.R.C. § 2032A(e)(7)(C)(ii) —
where the executor elects to have the value of the farm for farming purposes determined
and that there is no comparable land from which the average net share rental may
be determined under paragraph (8).
I.R.C. § 2032A(e)(8) Method Of Valuing Closely Held Business Interests, Etc. —
In any case to which paragraph (7)(A) does not apply, the following factors shall
apply in determining the value of any qualified real property:
I.R.C. § 2032A(e)(8)(A) —
The capitalization of income which the property can be expected to yield for farming
or closely held business purposes over a reasonable period of time under prudent
management using traditional cropping patterns for the area, taking into account
soil capacity, terrain configuration, and similar factors,
I.R.C. § 2032A(e)(8)(B) —
The capitalization of the fair rental value of the land for farm land or closely
held business purposes,
I.R.C. § 2032A(e)(8)(C) —
Assessed land values in a State which provides a differential or use value assessment
law for farmland or closely held business,
I.R.C. § 2032A(e)(8)(D) —
Comparable sales of other farm or closely held business land in the same geographical
area far enough removed from a metropolitan or resort area so that nonagricultural
use is not a significant factor in the sales price, and
I.R.C. § 2032A(e)(8)(E) —
Any other factor which fairly values the farm or closely held business value of the
property.
I.R.C. § 2032A(e)(9) Property Acquired From Decedent —
Property shall be considered to have been acquired from or to have passed from the
decedent if—
I.R.C. § 2032A(e)(9)(A) —
such property is so considered under section 1014(b)
(relating to basis of property acquired from a decedent),
I.R.C. § 2032A(e)(9)(B) —
such property is acquired by any person from the estate, or
I.R.C. § 2032A(e)(9)(C) —
such property is acquired by any person from a trust (to the extent such property
is includible in the gross estate of the decedent).
I.R.C. § 2032A(e)(10) Community Property —
If the decedent and his surviving spouse at any time held qualified real property
as community property, the interest of the surviving spouse in such property shall
be taken into account under this section to the extent necessary to provide a result
under this section with respect to such property which is consistent with the result
which would have obtained under this section if such property had not been community
property.
I.R.C. § 2032A(e)(11) Bond In Lieu Of Personal Liability —
If the qualified heir makes written application to the Secretary for determination
of the maximum amount of the additional tax which may be imposed by subsection (c)
with respect to the qualified heir's interest, the Secretary (as soon as possible,
and in any event within 1 year after the making of such application) shall notify
the heir of such maximum amount. The qualified heir, on furnishing a bond in such
amount and for such period as may be required, shall be discharged from personal
liability for any additional tax imposed by subsection (c) and shall be entitled
to a receipt or writing showing such discharge.
I.R.C. § 2032A(e)(12) Active Management —
The term “active management” means the making of the management decisions
of a business (other than the daily operating decisions).
I.R.C. § 2032A(e)(13) Special Rules For Woodlands
I.R.C. § 2032A(e)(13)(A) In General —
In the case of any qualified woodland with respect to which the executor elects
to have this subparagraph apply, trees growing on such woodland shall not be treated
as a crop.
I.R.C. § 2032A(e)(13)(B) Qualified Woodland —
The term “qualified woodland” means any real property which—
I.R.C. § 2032A(e)(13)(B)(i) —
is used in timber operations, and
I.R.C. § 2032A(e)(13)(B)(ii) —
is an identifiable area of land such as an acre or other area for which records are
normally maintained in conducting timber operations.
I.R.C. § 2032A(e)(13)(C) Timber Operations —
The term “timber operations” means—
I.R.C. § 2032A(e)(13)(C)(i) —
the planting, cultivating, caring for, or cutting of trees, or
I.R.C. § 2032A(e)(13)(C)(ii) —
the preparation (other than milling)
of trees for market.
I.R.C. § 2032A(e)(13)(D) Election —
An election under subparagraph (A) shall be made on the return of the tax imposed
by section 2001. Such election shall be made in such manner as the Secretary shall by regulations
prescribe. Such an election, once made, shall be irrevocable.
I.R.C. § 2032A(e)(14) Treatment Of Replacement Property Acquired In Section 1031 Or 1033 Transactions
I.R.C. § 2032A(e)(14)(A) In General —
In the case of any qualified replacement property, any period during which there
was ownership, qualified use, or material participation with respect to the replaced
property by the decedent or any member of his family shall be treated as a period
during which there was such ownership, use, or material participation (as the case
may be) with respect to the qualified replacement property.
I.R.C. § 2032A(e)(14)(B) Limitation —
Subparagraph (A) shall not apply to the extent that the fair market value of the
qualified replacement property (as of the date of its acquisition) exceeds the fair
market value of the replaced property (as of the date of its disposition).
I.R.C. § 2032A(e)(14)(C) Definitions —
For purposes of this paragraph—
I.R.C. § 2032A(e)(14)(C)(i) Qualified Replacement Property —
The term “qualified replacement property” means any real property which
is—
I.R.C. § 2032A(e)(14)(C)(i)(I) —
acquired in an exchange which qualifies under section 1031, or
I.R.C. § 2032A(e)(14)(C)(i)(II) —
the acquisition of which results in the nonrecognition of gain under section 1033.
Such term shall only include property which is used for the same qualified use as
the replaced property was being used before the exchange.
I.R.C. § 2032A(e)(14)(C)(ii) Replaced Property —
The term “replaced property” means—
I.R.C. § 2032A(e)(14)(C)(ii)(I) —
the property transferred in the exchange which qualifies under section 1031, or
I.R.C. § 2032A(e)(14)(C)(ii)(II) —
the property compulsorily or involuntarily converted (within the meaning of section
1033).
I.R.C. § 2032A(f) Statute Of Limitations —
If qualified real property is disposed of or ceases to be used for a qualified use,
then—
I.R.C. § 2032A(f)(1) —
the statutory period for the assessment of any additional tax under subsection (c)
attributable to such disposition or cessation shall not expire before the expiration
of 3 years from the date the Secretary is notified (in such manner as the Secretary
may by regulations prescribe) of such disposition or cessation (or if later in the
case of an involuntary conversion or exchange to which subsection (h) or (i) applies,
3 years from the date the Secretary is notified of the replacement of the converted
property or of an intention not to replace or of the exchange of property), and
I.R.C. § 2032A(f)(2) —
such additional tax may be assessed before the expiration of such 3-year period notwithstanding
the provisions of any other law or rule of law which would otherwise prevent such
assessment.
I.R.C. § 2032A(g) Application Of This Section And Section 6324B To Interests In Partnerships, Corporations,
And Trusts —
The Secretary shall prescribe regulations setting forth the application of this
section and section 6324B in the case of an interest in a partnership, corporation, or trust which, with respect
to the decedent, is an interest in a closely held business (within the meaning of
paragraph (1) of section 6166(b)). For purposes of the preceding sentence, an interest in a discretionary trust all
the beneficiaries of which are qualified heirs shall be treated as a present interest.
I.R.C. § 2032A(h) Special Rules For Involuntary Conversions Of Qualified Real Property
I.R.C. § 2032A(h)(1) Treatment Of Converted Property
I.R.C. § 2032A(h)(1)(A) In General —
If there is an involuntary conversion of an interest in qualified real property—
I.R.C. § 2032A(h)(1)(A)(i) —
no tax shall be imposed by subsection (c) on such conversion if the cost of the qualified replacement property equals or
exceeds the amount realized on such conversion, or
I.R.C. § 2032A(h)(1)(A)(ii) —
if clause (i) does not apply, the amount of the tax imposed by subsection (c) on such conversion shall be the amount determined under subparagraph (B).
I.R.C. § 2032A(h)(1)(B) Amount Of Tax Where There Is Not Complete Reinvestment —
The amount determined under this subparagraph with respect to any involuntary conversion
is the amount of the tax which
(but for this subsection) would have been imposed on such conversion reduced by an
amount which—
I.R.C. § 2032A(h)(1)(B)(i) —
bears the same ratio to such tax, as
I.R.C. § 2032A(h)(1)(B)(ii) —
the cost of the qualified replacement property bears to the amount realized on the
conversion.
I.R.C. § 2032A(h)(2) Treatment Of Replacement Property —
For purposes of subsection (c)—
I.R.C. § 2032A(h)(2)(A) —
any qualified replacement property shall be treated in the same manner as if it were
a portion of the interest in qualified real property which was involuntarily converted;
except that with respect to such qualified replacement property the 10-year period
under paragraph (1) of subsection (c) shall be extended by any period, beyond the 2-year period referred to in section
1033(a)(2)(B)(i), during which the qualified heir was allowed to replace the qualified real property,
I.R.C. § 2032A(h)(2)(B) —
any tax imposed by subsection (c) on the involuntary conversion shall be treated as a tax imposed on a partial disposition,
and
I.R.C. § 2032A(h)(2)(C) —
paragraph (6) of subsection (c) shall be applied—
I.R.C. § 2032A(h)(2)(C)(i) —
by not taking into account periods after the involuntary conversion and before the
acquisition of the qualified replacement property, and
I.R.C. § 2032A(h)(2)(C)(ii) —
by treating material participation with respect to the converted property as material
participation with respect to the qualified replacement property.
I.R.C. § 2032A(h)(3) Definitions And Special Rules —
For purposes of this subsection—
I.R.C. § 2032A(h)(3)(A) Involuntary Conversion —
The term “involuntary conversion” means a compulsory or involuntary conversion
within the meaning of section 1033.
I.R.C. § 2032A(h)(3)(B) Qualified Replacement Property —
The term “qualified replacement property” means—
I.R.C. § 2032A(h)(3)(B)(i) —
in the case of an involuntary conversion described in section 1033(a)(1), any real property into which the qualified real property is converted, or
I.R.C. § 2032A(h)(3)(B)(ii) —
in the case of an involuntary conversion described in section 1033(a)(2), any real property purchased by the qualified heir during the period specified in
section 1033(a)(2)(B) for purposes of replacing the qualified real property.
Such term only includes property which is to be used for the qualified use set forth
in subparagraph (A) or (B) of subsection
(b)(2) under which the qualified real property qualified under subsection
(a).
I.R.C. § 2032A(h)(4) Certain Rules Made Applicable —
The rules of the last sentence of section 1033(a)(2)(A) shall apply for purposes of paragraph (3)(B)(ii).
I.R.C. § 2032A(i) Exchanges Of Qualified Real Property
I.R.C. § 2032A(i)(1) Treatment Of Property Exchanged
I.R.C. § 2032A(i)(1)(A) Exchanges Solely For Qualified Exchange Property —
If an interest in qualified real property is exchanged solely for an interest in
qualified exchange property in a transaction which qualifies under section 1031, no tax shall be imposed by subsection (c) by reason of such exchange.
I.R.C. § 2032A(i)(1)(B) Exchanges Where Other Property Received —
If an interest in qualified real property is exchanged for an interest in qualified
exchange property and other property in a transaction which qualifies under section
1031, the amount of the tax imposed by subsection (c) by reason of such exchange shall be the amount of tax which (but for
this subparagraph) would have been imposed on such exchange under
subsection (c)(1), reduced by an amount which—
I.R.C. § 2032A(i)(1)(B)(i) —
bears the same ratio to such tax, as
I.R.C. § 2032A(i)(1)(B)(ii) —
the fair market value of the qualified exchange property bears to the fair market
value of the qualified real property exchanged.
For purposes of clause (ii) of the preceding sentence,
fair market value shall be determined as of the time of the exchange.
I.R.C. § 2032A(i)(2) Treatment Of Qualified Exchange Property —
For purposes of subsection (c)—
I.R.C. § 2032A(i)(2)(A) —
any interest in qualified exchange property shall be treated in the same manner as
if it were a portion of the interest in qualified real property which was exchanged,
I.R.C. § 2032A(i)(2)(B) —
any tax imposed by subsection (c) by reason of the exchange shall be treated as a tax imposed on a partial disposition,
and
I.R.C. § 2032A(i)(2)(C) —
paragraph (6) of subsection (c) shall be applied by treating material participation with respect to the exchanged
property as
material participation with respect to the qualified exchange property.
I.R.C. § 2032A(i)(3) Qualified Exchange Property —
For purposes of this subsection, the term “qualified exchange property”
means real property which is to be used for the qualified use set forth in subparagraph
(A) or (B) of subsection (b)(2) under which the real property exchanged therefor originally qualified under subsection
(a).
(Added by Pub. L. 94-455, title XX, Sec. 2003(a), Oct. 4, 1976, 90 Stat. 1856, and amended Pub. L. 95-472, Sec. 4(a), (c), Oct. 17, 1978, 92 Stat. 1334, 1336; Pub. L. 95-600, title VII, Sec. 702(d)(1), (2), (4),
(5), Nov. 6, 1978, 92 Stat. 2928, 2929; Pub. L. 97-34, title IV, Sec. 421(a)-(d)(2)(A), (e),
(f), (h)-(j)(2)(A), (3), (4), Aug. 13, 1981, 95 Stat. 306-313; Pub. L. 97-448, title I, Sec. 104(b)(1),
(2), Jan. 12, 1983, 96 Stat. 2381; Pub. L. 98-369, div. A, title X, Sec. 1025(a), July 18, 1984, 98 Stat. 1030; Pub. L. 99-514, title I, Sec. 104(b)(3), Oct. 22, 1986, 100 Stat. 2105; Pub. L. 100-647, title VI, Sec. 6151(a), Nov. 10, 1988, 102 Stat. 3724; Pub. L. 101-508, title XI, Sec. 11802(f)(5), Nov. 5,
1990, 104 Stat. 1388-530; Pub. L. 108-311, title II, Sec. 207(22), Oct. 4, 2004, 118 Stat. 1166; Pub. L. 115-97, title I, Sec. 11002(d)(1)(DD), Dec. 22, 2017, 131 Stat. 2054.)
BACKGROUND NOTES
AMENDMENTS
2017 — Subsec. (a)(3)(B). Pub. L. 115-97, Sec. 11002(d)(1)(DD), amended subpar. (B) by substituting “for ‘calendar year 2016’
in subparagraph (A)(ii)” for ‘‘for ‘calendar year 1992’
in subparagraph (B)’’.
2004 - Subsec. (c)(7)(D). Pub. L. 108-311, Sec. 207(22), amended subpar. (D) by substituting “section 152(f)(2)” for “section
151(c)(4)”.
1997 - Subsec. (a)(3). Pub. L. 105-34, Sec. 501(b), added par. (3).
Subsec. (b)(5)(A). Pub. L. 105-34, Sec. 504(b), struck the last sentence in subpar. (A). Prior to amendment it read as follows:
“For purposes of subsection (c), such surviving spouse shall not be treated
as failing to use such property in a qualified use solely because such spouse rents
such property to a member of such spouse's family on a net cash basis.”
Subsec. (c)(7)(E). Pub. L. 105-34, Sec. 504(a), added subpar. (E).
Subsec. (c)(8). Pub. L. 105-34, Sec. 508(c), added par. (8).
Subsec. (d)(3). Pub. L. 105-34, Sec. 1313(a), amended par. (3). Prior to amendment it read as follows:
“(3) Modification of election and agreement to be permitted
The Secretary shall prescribe procedures which provide that in any case in which--
(A) the executor makes an election under paragraph (1) within the time prescribed
for filing such election, and
(B) substantially complies with the regulations prescribed by the Secretary with respect
to such election, but--
(i) the notice of election, as filed, does not contain all required information, or
(ii) signatures of 1 or more persons required to enter into the agreement described
in paragraph
(2) are not included on the agreement as filed, or the agreement does not contain
all required information, the executor will have a reasonable period of time (not
exceeding 90 days) after notification of such failures to provide such information
or agreements.”
1990 - Subsec. (a)(2). Pub. L. 101-508 amended par. (2)
generally, substituting present provisions for provisions which established graduated
increase in applicable limit on aggregate reduction in fair market value from $600,000
in the case of decedents dying in 1981 to $750,000 in the case of decedents dying
in 1983 or thereafter.
1988 - Subsec. (b)(5)(A). Pub. L. 100-647 inserted at end
‘For purposes of subsection (c), such surviving spouse shall not be treated
as failing to use such property in a qualified use solely because such spouse rents
such property to a member of such spouse's family on a net cash basis.'
1986 - Subsec. (c)(7)(D). Pub. L. 99-514 substituted ‘section 151(c)(4)’ for ‘section 151(e)(4)’.
1984 - Subsec. (d)(3). Pub. L. 98-369 added par. (3).
1983 - Subsec. (b)(5)(C). Pub. L. 97-448, Sec. 104(b)(1), added subpar. (C).
Subsec. (i)(1)(B)(ii). Pub. L. 97-448, Sec. 104(b)(2)(A), substituted ‘the qualified exchange property’ for ‘the other property’.
Subsec. (i)(3). Pub. L. 97-448, Sec. 104(b)(2)(B), substituted ‘subparagraph (A) or (B)’ for ‘subparagraph (A), (B),
or (C)’.
1981 - Subsec. (a)(2). Pub. L. 97-34, Sec. 421(a), substituted ‘Limit on aggregate reduction in fair market value’ for
‘Limitation’ in heading ‘shall not exceed the applicable limit set
forth in the following table:’ for ‘shall not exceed $500,000’ in
text, and inserted table.
Subsec. (b)(1). Pub. L. 97-34, Sec. 421(b)(1), substituted ‘qualified use by the decedent or a member of the decedent's family'
for ‘qualified use’ in provision preceding subpar. (A), and in subpars.
(A)(i) and (C)(i).
Subsec. (b)(4), (5). Pub. L. 97-34, Sec. 421(b)(2), added pars. (4) and (5).
Subsec. (c)(1). Pub. L. 97-34, Sec. 421(c)(1)(A), substituted ‘10 years’ for ‘15 years’.
Subsec. (c)(2)(E). Pub. L. 97-34, Sec. 421(h)(2), added subpar. (E).
Subsec. (c)(3). Pub. L. 97-34, Sec. 421(c)(1)(B)(i), redesignated par. (4) as (3) and struck out former par. (3), which provided for
a phaseout of additional tax between the 10th and 15th years.
Subsec. (c)(4), (5). Pub. L. 97-34, Sec. 421(c)(1)(B)(i), redesignated pars. (5) and (6) as (4) and (5), respectively.
Former par. (4) redesignated (3).
Subsec. (c)(6). Pub. L. 97-34, Sec. 421(c)(2)(B)(ii), in subpar. (B) substituted ‘more than 3 years’ for ‘3 years or
more’.
Pub. L. 97-34, Sec. 421(c)(1)(B)(i), redesignated par.
(7) as (6). Former par. (6) redesignated (5).
Subsec. (c)(7). Pub. L. 97-34, Sec. 421(c)(1)(B)(i),
(2)(A), added par. (7). Former par. (7) redesignated (6).
Subsec. (d)(1). Pub. L. 97-34, Sec. 421(j)(3), substituted ‘The election under this section shall be made on the return of
the tax imposed by section 2001. Such election shall be made in such manner as the
Secretary shall by regulations prescribe. Such an election, once made, shall be irrevocable.’
for ‘The election under this section shall be made not later than the time prescribed
by section 6075(a) for filing the return of tax imposed by section 2001 (including
extensions thereof), and shall be made in such manner as the Secretary shall by regulations
prescribe.’
Subsec. (e)(2). Pub. L. 97-34, Sec. 421(i), substituted provisions designated subpars. (A) through (D) for ‘such individual's
ancestor or lineal descendant, a lineal descendant of a grandparent of such individual,
the spouse of such individual, or the spouse of any such descendant'.
Subsec. (e)(7). Pub. L. 97-34, Sec. 421(f), added subpar. (B), redesignated former subpar. (B) as (C), and inserted ‘and
that there is no comparable land from which the average net share rental may be determined’
after
‘determined’ in subpar. (C), without specifying whether the language was
to be inserted in cl. (i) or (ii) of subpar. (C). In view of H. Rept. No. 97-201,
97th Cong., July 14, 1981, p. 492, the language was inserted in cl. (ii) as the probable
intent of Congress.
Subsec. (e)(9). Pub. L. 97-34, Sec. 421(j)(2)(A), struck out from subpar. (B) ‘in satisfaction of the right of such person to
a pecuniary bequest’ after ‘from the estate’ and in subpar.
(C) substituted ‘(to the extent such property is includible in the gross estate
of the decedent)’ for ‘in satisfaction of a right (which such person has
by reason of the death of the decedent) to receive from the trust a specific dollar
amount which is the equivalent of a pecuniary bequest’.
Subsec. (e)(12). Pub. L. 97-34, Sec. 421(c)(2)(B)(i), added par. (12).
Subsec. (e)(13), (14). Pub. L. 97-34, Sec. 421(h)(1),
(j)(4), added pars. (13) and (14).
Subsec. (f)(1). Pub. L. 97-34, Sec. 421(e)(2), substituted ‘to which subsection (h)’ for ‘to which an election
under subsection (h)’.
Pub. L. 97-34, Sec. 421(d)(2)(A), substituted ‘conversion or exchange’, ‘(h) or (i)’, and
‘replace or of the exchange of property’
for ‘conversion’, ‘(h)’, and ‘replace’.
Subsec. (g). Pub. L. 97-34, Sec. 421(j)(1), inserted provision that for purposes of the preceding sentence, an interest in a
discretionary trust all the beneficiaries of which are qualified heirs shall be treated
as a present interest.
Subsec. (h)(1)(A). Pub. L. 97-34, Sec. 421(e)(1)(A), struck out ‘and the qualified heir makes an election under this subsection’
after ‘qualified real property’.
Subsec. (h)(2)(A). Pub. L. 97-34, Sec. 421(c)(1)(B)(ii), substituted ‘; except that’ for ‘, except that’ and ‘the
10-year period’
for ‘the 15-year period’, deleted cl. (i) designation, and struck out
cl. (ii), which provided the phaseout period under par. (3) of subsec. (c) be appropriately
adjusted to take into account the extension referred to in cl. (i).
Subsec. (h)(2)(C). Pub. L. 97-34, Sec. 421(c)(1)(B)(iii), substituted ‘(6)’ for ‘(7)’ in provisions preceding cl.
(i).
Subsec. (h)(5). Pub. L. 97-34, Sec. 421(e)(1)(B), struck out par. (5) which provided for making a subsec. (h) election at such time
and in such manner as the Secretary may by regulations prescribe.
Subsec. (i). Pub. L. 97-34, Sec. 421(d)(1), added subsec. (i).
1978 - Subsec. (b)(1). Pub. L. 95-600, Sec. 702(d)(1), inserted ‘which was acquired from or passed from the decedent to a qualified
heir of the decedent and’ after ‘located in the United States’.
Subsec. (c)(6). Pub. L. 95-600, Sec. 702(d)(5)(A), inserted ‘unless the heir has furnished bond which meets the requirements
of subsection (e)(11)’ after ‘respect to his interest’.
Subsec. (e)(9). Pub. L. 95-600, Sec. 702(d)(2), added par. (9).
Subsec. (e)(10). Pub. L. 95-600, Sec. 702(d)(4), added par. (10).
Subsec. (e)(11). Pub. L. 95-600, Sec. 702(d)(5)(B), added par. (11).
Subsec. (f)(1). Pub. L. 95-472, Sec. 4(c), inserted provision relating to the expiration of the statutory period for the assessment
of additional tax due under subsec. (c) in the case of an involuntary conversion to
which an election under subsec. (h) is applicable.
Subsec. (h). Pub. L. 95-472, Sec. 4(a), added subsec. (h).
EFFECTIVE DATE OF 2017 AMENDMENT
Amendment by Sec. 11002(d)(1)(DD) of Pub. L. 115-97 effective for taxable years beginning after December 31, 2017.
EFFECTIVE DATE OF 2004 AMENDMENT
Amendment by Sec. 207(22) of Pub. L. 108-311 applicable to taxable years beginning after December 31, 2004.
EFFECTIVE DATE OF 1997 AMENDMENTS
Amendment by Sec. 501(b) of Pub. L. 105-34 applicable to estates of decedents dying, and gifts made, after December 31, 1997.
Amendment by Sec. 504 of Pub. L. 105-34 applicable with respect to leases entered into after December 31, 1976.
Amendment by Sec. 508(c) of Pub. L. 105-34 applicable to easements granted after December 31, 1997.
Amendment by Sec. 1313(a) of Pub. L. 105-34 applicable to estates of decedents dying after the date of the enactment of this
Act [Aug. 5, 1997].
EFFECTIVE DATE OF 1988 AMENDMENT
Section 6151(b) of Pub. L. 100-647 provided that:
‘(1) In general. - The amendment made by subsection
(a) (amending this section) shall apply with respect to rentals occurring after December
31, 1976.
‘(2) Waiver of statute of limitations. - If on the date of the enactment of
this Act (Nov. 10, 1988) (or at any time within 1 year after such date of enactment)
refund or credit of any overpayment of tax resulting from the application of the amendment
made by subsection (a) is barred by any law or rule of law, refund or credit of such
overpayment shall, nevertheless, be made or allowed if claim therefore is filed before
the date 1 year after the date of the enactment of this Act.’
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by Pub. L. 99-514 applicable to taxable years beginning after Dec. 31, 1986, see section 151(a) of
Pub. L. 99-514, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1984 AMENDMENT
Section 1025(b) of Pub. L. 98-369, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
‘(1) In general. - The amendment made by this section
(amending this section) shall apply to estates of decedents dying after December 31,
1976.
‘(2) Refund or credit of overpayment barred by statute of limitations. - Notwithstanding
section 6511(a) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954) or any other period of limitation or lapse of time, a claim for credit or refund
of overpayment of the tax imposed by such Code which arises by reason of this section
may be filed by any person at any time within the 1-year period beginning on the date
of the enactment of this Act (July 18, 1984). Sections 6511(b) and 6514 of such Code
shall not apply to any claim for credit or refund filed under this subsection within
such 1-year period.'
EFFECTIVE DATE OF 1983 AMENDMENT
Amendment by Pub. L. 97-448 effective, except as otherwise provided, as if it had been included in the provision
of the Economic Recovery Tax Act of 1981, Pub. L. 97-34, to which such amendment relates, see section 109 of Pub. L. 97-448, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1981 AMENDMENT
Section 421(k) of Pub. L. 97-34, as amended by Pub. L. 97-448, title I, Sec. 104(b)(4), Jan. 12, 1983, 96 Stat. 2382; Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
‘(1) In general. - Except as otherwise provided in this subsection, the amendments
made by this section (amending this section and sections 1016, 1040, and 6324B of
this title) shall apply with respect to the estates of decedents dying after December
31, 1981.
‘(2) Increase in limitation. - The amendment made by subsection (a) (amending
this section) shall apply with respect to the estates of decedents dying after December
31, 1980.
‘(3) Subsection (d). - The amendments made by subsection
(d) (amending this section and section 6324B of this title) shall apply with respect
to exchanges after December 31, 1981.
‘(4) Subsection (e). - The amendments made by subsection
(e) (amending this section) shall apply with respect to involuntary conversions after
December 31, 1981.
‘(5) Certain amendments made retroactive to 1976.
-
‘(A) In general. - The amendments made by subsections (b)(1), (j)(1), and (j)(2)
(amending this section and section 1040 of this title) and the provisions of subparagraph
(A) of section 2032A(c)(7) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954) (as added by subsection
(c)(2)) shall apply with respect to the estates of decedents dying after December
31, 1976.
‘(B) Timely election required.
- Subparagraph (A) shall only apply in the case of an estate if a timely election
under section 2032A was made with respect to such estate. If the estate of any decedent
would not qualify under section 2032A of the Internal Revenue Code of 1986 but for the amendments described in subparagraph (A) and the time for making
an election under section 2032A with respect to such estate would (but for this sentence)
expire after July 28, 1980, the time for making such election shall not expire before
the close of February 16, 1982.
‘(C) Reinstatement of elections.
- If any election under section 2032A was revoked before the date of the enactment
of this Act (Aug. 13, 1981), such election may be reinstated at any time before February
17, 1982.
‘(D) Statute of limitations.
- If on the date of the enactment of this Act (Aug. 13, 1981) (or at any time before
February 17, 1982) the making of a credit or refund of any overpayment of tax resulting
from the amendments described in subparagraph (A) is barred by any law or rule of
law, such credit or refund shall nevertheless be made if claim therefor is made before
February 17, 1982.’
EFFECTIVE DATE OF 1978 AMENDMENTS
Section 702(d)(6) of Pub. L. 95-600 provided that: ‘The amendments made by this subsection (amending this section
and section 1040 of this title)
shall apply to the estates of decedents dying after December 31, 1976.’
Amendment of section by Pub. L. 95-472 applicable with respect to involuntary conversions after Dec. 31, 1976, see section
4(d) of Pub. L. 95-472, set out as a note under section 1016 of this title.
EFFECTIVE DATE
Section 2003(e) of Pub. L. 94-455 provided that: ‘The amendments made by this section (enacting this section
and section 6324B of this title and amending section 2013 of this title) shall apply
to the estates of decedents dying after December 31, 1976.’
WAIVER OF STATUTE OF LIMITATION FOR TAXES ON CERTAIN FARM VALUATIONS
Section 581 of Pub. L. 107-16 provided that:
“If on the date of the enactment of this Act (or at any time within 1 year after
the date of the enactment) a refund or credit of any overpayment of tax resulting
from the application of section 2032A(c)(7)(E) of the Internal Revenue Code of 1986 is barred by any law or rule of law, the refund or credit of such overpayment
shall, nevertheless, be made or allowed if claim therefor is filed before the date
1 year after the date of the enactment of this Act [Enacted: June 7, 2001].”
REINSTATEMENT OF ESTATE TAX; REPEAL OF CARRYOVER BASIS
Section 301 of Pub. L. 111-312 provided:
“(a)
IN GENERAL.—Each provision of law amended by subtitle A or E of title V of the
Economic Growth and Tax Relief Reconciliation Act of 2001 is amended to read as such
provision would read if such subtitle had never been enacted.
“(b)
CONFORMING AMENDMENT.—On and after January 1, 2011, paragraph
(1) of section 2505(a) of the Internal Revenue Code of 1986 is amended to read as such paragraph would read if section 521(b)(2) of the
Economic Growth and Tax Relief Reconciliation Act of 2001 had never been enacted.
“(c)
SPECIAL ELECTION WITH RESPECT TO ESTATES OF DECEDENTS DYING IN 2010.—Notwithstanding
subsection (a), in the case of an estate of a decedent dying after December 31, 2009,
and before January 1, 2011, the executor (within the meaning of section 2203 of the Internal Revenue Code of 1986) may elect to apply such Code as though the amendments made by subsection
(a) do not apply with respect to chapter 11 of such Code and with respect to property
acquired or passing from such decedent (within the meaning of section 1014(b) of such
Code). Such election shall be made at such time and in such manner as the Secretary
of the Treasury or the Secretary's delegate shall provide. Such an election once made
shall be revocable only with the consent of the Secretary of the Treasury or the Secretary's
delegate. For purposes of section 2652(a)(1) of such Code, the determination of whether
any property is subject to the tax imposed by such chapter 11 shall be made without
regard to any election made under this subsection.
“(d)
EXTENSION OF TIME FOR PERFORMING CERTAIN ACTS.—
“
(1) ESTATE TAX.—In the case of the estate of a decedent dying after December
31, 2009, and before the date of the enactment of this Act, the due date for—
“(A)
filing any return under section 6018 of the Internal Revenue Codeof 1986 (including any election required to be made on such a return) as such section
is in effect after the date of the enactment of this Act without regard to any election
under subsection (c),
“(B)
making any payment of tax under chapter 11 of such Code, and
“(C)
making any disclaimer described in section 2518(b) of such Code of an interest in
property passing by reason of the death of such decedent, shall not be earlier than
the date which is 9 months after the date of the enactment of this Act.
“(2)
GENERATION-SKIPPING TAX.—In the case of any generation-skipping transfer made
after December 31, 2009, and before the date of the enactment of this Act, the due
date for filing any return under section 2662 of the Internal Revenue Code of 1986 (including any election required to be made on such a return)
shall not be earlier than the date which is 9 months after the date of the enactment
of this Act.
“(e)
EFFECTIVE DATE.—Except as otherwise provided in this section, the amendments
made by this section shall apply to estates of decedents dying, and transfers made,
after December 31, 2009.”
TERMINATION
Section 501(a) (Estate Tax Repeal) of Pub. L. 107-16 added Code Sec. 2210, which states that chapter 11 of subtitle B shall not apply
to the estates of decedents dying after December 31, 2009.
Note, however, that Section 901 (Sunset of Provisions of Act) of Pub. L. 107-16, as amended by Pub. L. 107-358 and Pub. L. 111-312, and struck by Pub. L. 112-240, Sec. 101(a)(1) (effective for taxable, plan, or limitation years beginning after Dec. 31, 2012,
and estates of decedents dying, gifts made, or generation skipping transfers after
Dec. 31, 2012), provided that:
“(a)
IN GENERAL.--All provisions of, and amendments made by, this Act shall not apply--
“(1) to taxable, plan, or limitation years beginning after December 31, 2012,
or
“(2) in the case of title V, to estates of decedents dying, gifts made, or generation
skipping transfers, after December 31, 2012.
“(b)
APPLICATION OF CERTAIN LAWS.--The Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 shall be applied
and administered to years, estates, gifts, and transfers described in subsection (a)
as if the provisions and amendments described in subsection (a) had never been enacted.
“(c)
EXCEPTION.-Subsection (a) shall not apply to section 803 (relating to no federal income
tax on restitution received by victims of the Nazi regime or their heirs or estates).”
tion (a) shall not apply to section 803 (relating to no federal income tax on restitution
received by victims of the Nazi regime or their heirs or estates).”
SAVINGS PROVISION
For provisions that nothing in amendment by Pub. L. 101-508 be construed to affect treatment of certain transactions occurring, property acquired,
or items of income, loss, deduction, or credit taken into account prior to Nov. 5,
1990, for purposes of determining liability for tax for periods ending after Nov.
5, 1990, see section 11821(b) of Pub. L. 101-508, set out as a note under section 29 of this title.
INFORMATION NECESSARY FOR VALID SPECIAL USE VALUATION ELECTION
Section 1421 of Pub. L. 99-514, as amended by Pub. L. 100-647, title I, Sec. 1014(f), Nov. 10, 1988, 102 Stat. 3562, provided that:
‘(a) In General. - In the case of any decedent dying before January 1, 1986,
if the executor -
‘(1) made an election under section 2032A of the Internal Revenue Code of 1954 (now 1986) on the return of tax imposed by section 2001 of such Code, and
‘(2) provided substantially all the information with respect to such election
required on such return of tax, such election shall be a valid election for purposes
of section 2032A of such Code.
‘(b) Executor Must Provide Information. - An election described in subsection
(a) shall not be valid if the Secretary of the Treasury or his delegate after the
date of the enactment of this Act (Oct. 22, 1986) requests information from the executor
with respect to such election and the executor does not provide such information within
90 days of receipt of such request.
‘(c) Effective Date. - The provisions of this section shall not apply to the
estate of any decedent if before the date of the enactment of this Act (Oct. 22, 1986)
the statute of limitations has expired with respect to -
‘(1) the return of tax imposed by section 2001 of the Internal Revenue Code of 1954 (now 1986), and
‘(2) the period during which a claim for credit or refund may be timely filed.
‘(d) Special Rule for Certain Estate. - Notwithstanding subsection (a)(2), the
provisions of this section shall apply to the estate of an individual who died on
January 30, 1984, and with respect to which -
‘(1) a Federal estate tax return was filed on October 30, 1984, electing current
use valuation, and
‘(2) the agreement required under section 2032A was filed on November 9, 1984.’
LAND DIVERTED UNDER 1983 PAYMENT-IN-KIND PROGRAM
Land diverted from production of agricultural commodities under a 1983 payment-in-kind
program to be treated, for purposes of this section, as used during the 1983 crop
year by qualified taxpayers in the active conduct of the trade or business of farming,
with qualified taxpayers who materially participate in the diversion and devotion
to conservation uses under a 1983 payment-in-kind program to be treated as materially
participating in the operation of such land during the 1983 crop year, see section
3 of Pub. L. 98-4, set out as a note under section 61 of this title.
