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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
follows:
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.
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