Farmers and Ranchers Minimizing Estate Regulations Act of 2013 or the FARMER Act of 2013 - Amends the Internal Revenue Code, with respect to the special use valuation of farms and other property used in a trade or business for estate tax purposes, to: (1) increase to $2 million the allowable reduction in the fair market value of such property for valuation purposes, (2) reduce the required holding period for such property for eligibility and recapture purposes, (3) allow rentals of such property by controlled entities to qualify as a special use, (4) repeal the requirement to use the gross cash rental method for valuing such property, and (5) exempt woodlands subject to a management plan from the additional tax for early dispositions of such property and for failure to comply with special use requirements.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1448 Introduced in House (IH)]
113th CONGRESS
1st Session
H. R. 1448
To amend the Internal Revenue Code of 1986 to increase the aggregate
reduction in the fair market value of farm, etc., real property under
section 2032A to $2,000,000, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 9, 2013
Mr. Austin Scott of Georgia (for himself, Mr. Broun of Georgia, Mr.
Westmoreland, Mr. Rogers of Alabama, Mr. Yoho, Mr. McIntyre, Mr.
Kingston, and Mr. Crawford) 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 increase the aggregate
reduction in the fair market value of farm, etc., real property under
section 2032A to $2,000,000, 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 ``Farmers and Ranchers Minimizing
Estate Regulations Act of 2013'' or the ``FARMER Act of 2013''.
SEC. 2. MODIFICATIONS TO ALTERNATE VALUATION OF FARM, ETC., REAL
PROPERTY.
(a) Maximum Reduction Increased to $2,000,000.--
(1) In general.--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''.
(2) Conforming amendment.--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--
``(A) $2,000,000, multiplied by
``(B) 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.''.
(b) Reduction in Required Holding and Use Periods of Decedent.--
Subparagraph (C) of section 2032A(b)(1) of such Code is amended--
(1) by striking ``8-year period'' and inserting ``5-year
period'', and
(2) by striking ``5 years'' and inserting ``3 years''.
(c) Reduction in Required Holding and Use Periods To Avoid
Recapture.--
(1) In general.--Paragraph (1) of section 2032A(c) of such
Code is amended--
(A) by striking ``10 years'' and inserting ``5
years'', and
(B) by striking subparagraph (B) and inserting the
following new subparagraph:
``(B) 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,''.
(2) Conforming amendment.--Clause (ii) of section
2032A(c)(7)(A) of such Code is amended by striking ``10-year''
and inserting ``5-year''.
(d) Certain Rents From Controlled Entities Treated as Qualified.--
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''.
(e) Repeal of Use of Gross Cash Rental of Comparable Land in
Valuing Farms.--
(1) In general.--Subparagraphs (A) and (B) of section
2032A(e)(7) of such Code (relating to method of valuing farms)
are amended to read as follows:
``(A) In general.--The value of a farm for farming
purposes shall be determined by dividing--
``(i) 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
``(ii) 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.
``(B) Net share rental.--For purposes of this
paragraph, the term `net share rental' means the excess
of--
``(i) the value of the produce received by
the lessor of the land on which such produce is
grown, over
``(ii) the cash operating expenses of
growing such produce which, under the lease,
are paid by the lessor.''.
(2) Conforming amendment.--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''.
(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. WOODLANDS SUBJECT TO MANAGEMENT PLAN.
(a) In General.--Paragraph (2) of section 2032A(c) of the Internal
Revenue Code of 1986 is amended by adding at the end the following new
subparagraph:
``(F) Exception for woodlands subject to management
plan.--Subparagraph (E) shall not apply to any
disposition or severance of standing timber on a
qualified woodland if the harvest is--
``(i) consistent with a written forest
management 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) conducted under the guidance of a
qualified forestry professional (as determined
by the Secretary in consultation with the
United States Forest Service), or
``(iii) conducted on lands certified to a
third-party audited forest certification system
or similar land management protocol, as
determined by the United States Forest
Service.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to the disposition or severance of standing timber 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.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line