- 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 NextLast modified: May 25, 2011