Sec. 2. Modifications to alternate valuation of farm, etc., real property
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/bill/113/hr/1448/ih/section-2·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
$2,000,000 Paragraph
(2)of section 2032A(a) of the Internal Revenue Code of 1986 (relating to limitation on aggregate reduction in fair market value) is amended by striking $750,000 and inserting $2,000,000 . The first sentence of section 2032A(a)(3) of such Code is amended to read as follows: In the case of estates of decedents dying in a calendar year after 2012, the $2,000,000 amount contained in paragraph
(2)shall be increased by an amount equal to— $2,000,000, multiplied by the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting calendar year 2011 for calendar year 1992 in subparagraph
(B)thereof. . Subparagraph
(C)of section 2032A(b)(1) of such Code is amended— by striking 8-year period and inserting 5-year period , and by striking 5 years and inserting 3 years . Paragraph
(1)of section 2032A(c) of such Code is amended— by striking 10 years and inserting 5 years , and by striking subparagraph
(B)and inserting the following new subparagraph: there have been periods aggregating 3 years or more during which the qualified heir does not use for the qualified use the qualified real property which was acquired (or passed) from the decedent, . Clause
(ii)of section 2032A(c)(7)(A) of such Code is amended by striking 10-year and inserting 5-year . Subparagraph
(E)of section 2032A(c)(7) of such Code is amended by inserting (or to an entity more than 50 percent (by vote and value) of the equity interests in which are owned directly by members of such family) after descendant . Subparagraphs
(A)and
(B)of section 2032A(e)(7) of such Code (relating to method of valuing farms) are amended to read as follows: The value of a farm for farming purposes shall be determined by dividing— the excess of the average annual net share 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 the average annual effective interest rate for all new Federal Land Bank loans. For purposes of the preceding sentence, the average annual net share rental computation shall be made on the basis of the 5 most recent calendar years ending before the date of the decedent's death. For purposes of this paragraph, the term net share rental means the excess of— the value of the produce received by the lessor of the land on which such produce is grown, over the cash operating expenses of growing such produce which, under the lease, are paid by the lessor. . Subparagraph
(C)of section 2032A(e)(7) of such Code is amended by striking that there is no comparable land from which the average annual gross cash rental may be determined, and . The amendments made by this section shall apply to estates of decedents dying after the date of the enactment of this Act.