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estate was entitled to, and properly received, a special
valuation for the farm under section 2032A.
Petitioner farmed the Nicollet farm for almost 8 years, from
the time of his father's death until early 1991. Respondent does
not dispute that petitioner materially participated in farming
the subject property during this period. On November 27, 1990,
Hohenstein suffered an injury to his back, which necessitated
surgery. Due to the injury, he can no longer perform the
physical labor associated with farming.
As a result of petitioner's physical incapacity, on March
21, 1991,1 he sold a 75-acre parcel of the Nicollet farm to an
unrelated party. Shortly thereafter, he filed a Form 706-A,
United States Additional Estate Tax Return, reporting the
disposition and paying the recapture tax due of $27,122.
On March 31, 1991, petitioner entered into two separate cash
leases with nonfamily members for the two parcels constituting
the balance of the Nicollet farm (the subject property in the
instant case).
The initial lease for the first parcel (consisting of
approximately 105 acres) agreed to a 1-year term for the sum of
$11,844, payable in a single installment due on or before April
15, 1991. The lease for the second parcel (comprising
1 Although the parties stipulate that the date was March
31, 1991, the Schedule A attached to the Form 706-A states the
date of disposition was March 21, 1991.
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