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Congressional intent in enacting section 2032A and ignores the
personal circumstances driving the transactions at issue.
I. Petitioner Erroneously Conflates the Material Participation
and Qualified Use Provisions of Section 2032A(c)(6)
Petitioner equates the material participation requirement of
section 2032A(c)(6)(B) with the qualified use requirement of
section 2032A(c)(6)(A). Petitioner argues that because he
materially participated in the farm after his father's death, he
could not have ceased to use the farm for its qualifying use.
However, the cessation of qualified use provision is phrased in
the disjunctive and denotes two separate grounds for
disqualification from favored tax treatment. Thus, cessation
occurs if either the property ceases to be used for the qualified
use by the qualified heir or the heir or his family does not
materially participate in the qualified use. Martin v.
Commissioner, 783 F.2d at 82; Stovall v. Commissioner, 101 T.C.
at 148; Williamson v. Commissioner, 93 T.C. 242, 247 (1989),
affd. 974 F.2d 1525 (9th Cir. 1992). The parties have stipulated
to petitioner's material participation for the requisite period.
Thus, we address only whether 2032A(c)(6)(A) has been satisfied,
a wholly independent inquiry.
II. Cash Leasing by a Qualified Heir to an Unrelated Party
Constitutes a Cessation of Qualified Use
While section 2032A itself does not mention cash leasing,
the legislative history of the statute and pertinent regulations
discuss the effect of such leases on the qualified use of real
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