Family Farm Estate Tax Relief Act of 2010 - Amends the Internal Revenue Code to: (1) exclude from the value of a decedent's gross estate farmland used by an heir for farming purposes; (2) impose a recapture tax on an heir who disposes of such farmland after the decedent's death or who ceases to use such farmland for farming purposes; and (3) increase the limitation on the estate tax exclusion for land subject to a qualified conservation easement to $5 million and the percentage of the value of such land that is excludable.
[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5475 Introduced in House (IH)]
111th CONGRESS
2d Session
H. R. 5475
To amend the Internal Revenue Code of 1986 to exempt certain farmland
from the estate tax, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 28, 2010
Mr. Thompson of California (for himself, Mr. Salazar, Mr. McCarthy of
California, Mr. Blumenauer, Mr. Cardoza, Mr. Costa, Mr. Farr, Mr.
Manzullo, Mr. Ellsworth, Mrs. Capps, Mr. Kratovil, Mr. Cuellar, Mr.
Kind, Ms. Eshoo, Mr. Radanovich, Mr. Conaway, Mr. Garamendi, Mr. Berry,
Ms. Matsui, Ms. Herseth Sandlin, Mr. Simpson, and Mr. Minnick)
introduced the following bill; which was referred to the Committee on
Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to exempt certain farmland
from the estate tax, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Family Farm Estate Tax Relief Act of
2010''.
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 executor elects the application of this section
and files an agreement referred to in section 2032A(d)(2), and
``(2) the decedent was (at the date of the decedent's
death) a citizen or resident of the United States.
``(c) Definitions.--For purposes of this section--
``(1) Qualified farmland.--The term `qualified farmland'
means any real property which--
``(A) is located in the United States,
``(B) is used as a farm for farming purposes
(within the meaning of section 2032A(e)),
``(C) 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, and
``(D) is property designated in the agreement filed
under subsection (b)(1).
``(2) 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.--
``(A) In general.--Except as provided in
subparagraph (B), rules similar to the rules of section
2032A(c) (other than paragraph (2)(E) thereof) with
respect to the additional estate tax shall apply for
purposes of this subsection with respect to the
recapture tax.
``(B) Adjustment of recapture tax to reflect
increase in value of farmland.--The amount of the
recapture tax otherwise determined under rules
described in subparagraph (A) shall be increased by the
percentage (if any) by which the value of the interest
in the qualified farmland at the time of the imposition
of such tax is greater than the adjusted value of such
farmland included in the estate.
``(e) Application of Other Rules.--Rules similar to the rules of
subsections (d), (e) (other than paragraph (13) thereof), (f), (g),
(h), and (i) of section 2032A shall apply for purposes of this
section.''.
(b) Application of Lien.--Section 6324B of the Internal Revenue
Code of 1986 (relating to special lien for additional estate tax
attributable to farm, etc., valuation) is amended by adding at the end
the following new subsection:
``(e) Application to Qualified Farmland.--
``(1) In general.--In the case of any interest in qualified
farmland (within the meaning of section 2033A(c)(1)), this
section shall apply in the same manner as such section applies
to qualified real property.
``(2) Form and content.--In addition to any form and
content otherwise required by the Secretary with respect to a
notice of lien filed against qualified farmland, such notice
shall include a statement that such lien is imposed solely for
purposes of the estate tax exclusion granted with respect to
such qualified farmland under section 2033A.''.
(c) Woodlands Subject to Management Plan.--Paragraph (2) of section
2032A(c) of such Code is amended by adding at the end the following new
subparagraph:
``(F) Exception for woodlands subject to forest
stewardship plan.--
``(i) In general.--Subparagraph (E) shall
not apply to any disposition or severance of
standing timber on a qualified woodland that is
made pursuant to a forest stewardship plan
developed under the Cooperative Forestry
Assistance Act of 1978 (16 U.S.C. 2103a) or an
equivalent plan approved by the State Forester.
``(ii) Compliance with forest stewardship
plan.--Clause (i) shall not apply if, during
the 10-year period under paragraph (1), the
qualified heir fails to comply with such forest
stewardship plan or equivalent plan.''.
(d) Certain Conservation Transactions Not Treated as
Dispositions.--Paragraph (8) of section 2032A(c) of such Code is
amended to read as follows:
``(8) Certain conservation transactions not treated as
dispositions.--
``(A) Qualified conservation contributions.--A
qualified conservation contribution by gift or
otherwise shall not be deemed a disposition under
subsection (c)(1)(A).
``(B) Qualified conservation easement sold to
qualified organization.--A sale of a qualified
conservation easement to a qualified organization shall
not be deemed a disposition under subsection (c)(1)(A).
``(C) Definitions.--For purposes of this
paragraph--
``(i) the terms `qualified conservation
contribution' and `qualified organization' have
the meanings given such terms by section
170(h), and
``(ii) the term `qualified conservation
easement' has the meaning given such term by
section 2031(c)(8).''.
(e) Clerical Amendment.--The table of sections for part III of
subchapter A of chapter 11 of the Internal Revenue Code of 1986 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.''.
(f) Effective Date.--The amendments made by this section shall
apply to estates of decedents dying after the date of the enactment of
this Act.
SEC. 3. INCREASE IN LIMITATIONS ON THE AMOUNT EXCLUDED FROM THE GROSS
ESTATE WITH RESPECT TO LAND SUBJECT TO A QUALIFIED
CONSERVATION EASEMENT.
(a) Increase in Dollar Limitation on Exclusion.--Paragraph (3) of
section 2031(c) of the Internal Revenue Code of 1986 (relating to
exclusion limitation) is amended by striking ``the exclusion limitation
is'' and all that follows and inserting ``the exclusion limitation is
$5,000,000.''.
(b) Increase in Percentage of Value of Land Which Is Excludable.--
Paragraph (2) of section 2031(c) of the Internal Revenue Code of 1986
(relating to applicable percentage) is amended--
(1) by striking ``40 percent'' and inserting ``50
percent'', and
(2) by striking ``2 percentage points'' and inserting ``2.5
percentage points''.
(c) Effective Date.--The amendments made by this section shall
apply to the estates of decedents dying after the date of the enactment
of this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
Referred to the Subcommittee on Health.
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