Estate of Duane B. Farnam, Deceased, Mark D. Farnam, Personal Representative, and Estate of Lois L. Farnam, Deceased, Mark D. Farnam, Personal Representative - Page 14

                                       - 14 -                                         
               The legislative history of section 2057 is not of particular           
          help in resolving the issue before us.  Petitioners point to a              
          House-Senate conference committee report which contains a broad             
          reference to “any” interest in a family-owned business, as                  

               a qualified family-owned business interest is defined                  
               as any interest in a trade or business (regardless of                  
               the form in which it is held) with a principal place of                
               business in the United states if ownership of the trade                
               or business is held at least 50 percent by one family                  
               * * * [H. Conf. Rept. 105-220, at 396 (1997), 1997-4                   
               C.B. (Vol. 2) 1457, 1866.]                                             

               Petitioners also argue that the general purposes of section            
          2057 stated in the legislative history support a broad reading of           
          an interest which may qualify as a QFOBI.  Those purposes were:             
          (1) To reduce estate taxes for qualified family-owned businesses,           
          (2) to protect and preserve family farms and other family-owned             
          enterprises, and (3) to minimize the liquidation of such                    
          enterprises in order to pay estate taxes.  S. Rept. 105-33, at 40           
          (1997), 1997-4 C.B. (Vol. 2) 1067, 1120; see also Staff of Joint            
          Comm. on Taxation, General Explanation of Tax Legislation Enacted           
          in 1997, at 65 (J. Comm. Print 1997).  Petitioners contend that             
          these legislative purposes would be frustrated if estates owning            
          family businesses funded with equity qualified for the QFOBI                
          deduction but estates owning similar family businesses funded in            
          part with shareholder loans did not.                                        

Page:  Previous  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  Next 

Last modified: March 27, 2008