Estate of Carolyn J. Rogers - Page 21




                                       - 21 -                                         

               A.   Section 2032A(e)(7)5--The Formula Method                          

               5    SEC. 2032A(e).  Definitions; Special Rules.–-For                  
               purposes of this section-–                                             
                         *   *   *   *   *   *   *                                    
                    (7) Method of valuing farms.--                                    
                         (A) In general.-–Except as provided in                       
                    subparagraph (B), the value of a farm for farming                 
                    purposes shall be determined by dividing–-                        
                              (i) the excess of the average annual gross              
                         cash 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, each average annual            
               computation shall be made on the basis of the 5 most recent            
               calendar years ending before the date of the decedent’s                
               death.                                                                 
                         (B) Value based on net share rental in certain               
                    cases.--                                                          
                              (i) In general.-–If there is no comparable              
                         land from which the average annual gross cash                
                         rental may be determined but there is comparable             
                         land from which the average net share rental may             
                         be determined, subparagraph (A)(i) shall be                  
                         applied by substituting "average annual net share            
                         rental" for "average annual gross cash rental".              
                              (ii) 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                                          
                                                              (continued...)          





Page:  Previous  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  Next

Last modified: May 25, 2011