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The average annual State and local real estate taxes paid on the
five leased tracts for the 5 years preceding decedent’s death
were $1.1592 per acre.
The average annual effective interest rate for all new
Federal Land Bank loans for the 5 years preceding decedent's
death was 10.21 percent.
Discussion
I. Overview of Section 2032A–-Special Use Valuation
Generally, a decedent's gross estate includes the fair
market value of the decedent's interest in all property in which
the decedent owned an interest at the time of death. See secs.
2031, 2033; sec. 20.2031-1(b), Estate Tax Regs. However, in the
case of certain real property used by the decedent or a member of
the decedent's family for farming or in a closely held business,
section 2032A allows the decedent's personal representative to
elect to value the real property on the basis of its value as a
farm or in a closely held business, rather than the fair market
value of the property determined on the basis of its "highest and
best use". Sec. 20.2032A-3(a), Estate Tax Regs.; see sec.
2032A(a)(1), (e)(7) and (8); see also Stovall v. Commissioner,
101 T.C. 140, 146 (1993); Estate of Thompson v. Commissioner,
T.C. Memo. 1998-325.
Section 2032A was added to the Code by the Tax Reform Act of
1976, Pub. L. 94-455, sec. 2003, 90 Stat. 1520, 1856. The
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