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Save
the Family Farm and Ranch Act of 2007
(Introduced in
House)
HR 1929 IH
110th
CONGRESS
1st
Session
H.
R. 1929
To amend the Internal
Revenue Code of 1986 to exempt certain farmland from the estate tax.
IN
THE HOUSE OF REPRESENTATIVES
April 18,
2007
Mr. SALAZAR (for himself,
Mr. MAHONEY of
A
BILL
To amend the Internal
Revenue Code of 1986 to exempt certain farmland from the estate tax.
Be it enacted by the Senate and House of Representatives of the
SECTION
1. SHORT TITLE.
This Act may be cited as the `Save the Family Farm and Ranch Act of
2007'.
SEC. 2.
EXCLUSION FROM GROSS ESTATE OF CERTAIN FARMLAND SO LONG AS FARMLAND USE
CONTINUES.
(a) In General- Part III of subchapter A of chapter 11 of the
Internal Revenue Code of 1986 (relating to gross estate) is amended by
inserting after section 2033 the following new section:
SEC.
2033A. EXCLUSION OF CERTAIN FARMLAND SO LONG AS USE AS FARMLAND
CONTINUES.
`(a) In General- In the case of an estate of a decedent to which
this section applies, the value of the gross estate shall not include
the adjusted value of qualified farmland included in the estate.
`(b) Estates to Which Section Applies- This section shall apply to
an estate if--
`(1) the decedent was (at the date of the decedent's death) a
citizen or resident of the
`(2) with respect to each of 3 or more of the 5 consecutive taxable
years ending with the decedent's last taxable year, the decedent's gross
income from the trade or business of farming exceeds 50 percent of the
decedent's gross income, and
`(3) 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--
`(A) the qualified farmland was owned by the decedent or a member
of the decedent's family, and
`(B) there was material participation (within the meaning of
section 2032A(e)(6)) by the decedent or a member of the decedent's
family in the operation of such farmland.
Rules similar to the rules of paragraphs (4) and (5) of section
2032A(b) shall apply for purposes of subparagraph (B).
`(c) Definitions- For purposes of this section--
`(1) QUALIFIED FARMLAND- The term `qualified farmland' means any
real property--
`(A) which is located in the
`(B) which is used as a farm for farming purposes (within the
meaning of section 2032A(e)), and
`(C) 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 so used by the decedent or a member of the decedent's
family.
`(2) ADJUSTED VALUE- The term `adjusted value' means the value of
farmland for purposes of this chapter (determined without regard to this
section), reduced by the amount deductible under paragraph (3) or (4) of
section 2053(a).
`(3) OTHER TERMS- Any other term used in this section which is also
used in section 2032A shall have the same meaning given such term by
section 2032A.
`(d) Tax Treatment of Dispositions and Failures to Use for Farming
Purposes-
`(1) IMPOSITION OF RECAPTURE TAX- If, at any time after the
decedent's death and before the death of the qualified heir--
`(A) the qualified heir disposes of any interest in qualified
farmland (other than by a disposition to a member of his family), or
`(B) the qualified heir ceases to use the real property which was
acquired (or passed) from the decedent as a farm for farming purposes,
then, there is hereby imposed a recapture tax.
`(2) AMOUNT OF RECAPTURE TAX, ETC- Rules similar to the rules of
section 2032A(c) with respect to the additional estate tax shall apply
for purposes of this subsection with respect to the recapture tax.
`(e) Application of Other Rules- Rules similar to the rules of
subsections (e), (f), (g), (h), and (i) of section 2032A shall apply for
purposes of this section.'
(b) Clerical Amendment- The table of sections for part III of
subchapter A of chapter 11 of such Code is amended by inserting after
the item relating to section 2033 the following new item:
`Sec. 2033A. Exclusion of certain farmland so long as use as
farmland continues.'.
(c) Effective Date- The amendments made by this section shall apply
to estates of decedents dying after the date of the enactment of this
Act.
Source: http://thomas.loc.gov
(which yields only a temporary Internet address / URL)