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(2) Maximum deduction.--The deduction allowed
by this section shall not exceed $675,000.
Generally, under section 2057(b)(1)(C), for an estate to
qualify for a QFOBI deduction, the value of the QFOBIs owned by a
decedent at the time of death must exceed 50 percent of the total
value of the decedent’s adjusted gross estate--the so-called 50-
percent liquidity test. Section 2057(b)(1)(C) provides as
follows:
SEC. 2057. FAMILY-OWNED BUSINESS INTERESTS.
(b) Estates to Which Section Applies.--
(1) In general.--This section shall apply to
an estate if--
* * * * * * *
(C) the sum of--
(i) the adjusted value of the
qualified family-owned business
interests described in paragraph (2),
plus
(ii) the amount of the gifts of
such interests determined under
paragraph (3),
exceeds 50 percent of the adjusted gross
estate * * *
Under section 2057(e)(1), definitional provisions are
provided, and it is expressly stated in subparagraph (A) that a
QFOBI with regard to a sole proprietorship means only an equity
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Last modified: March 27, 2008