[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 2200 Introduced in Senate (IS)]

112th CONGRESS
  2d Session
                                S. 2200

  To amend the Internal Revenue Code of 1986 to exempt certain family-
            owned farms and businesses from the estate tax.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 15, 2012

    Mr. Lee introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to exempt certain family-
            owned farms and businesses from the estate tax.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Saving the Family Farm Act of 
2012''.

SEC. 2. EXCLUSION FROM GROSS ESTATE OF CERTAIN FARMLAND SO LONG AS 
              FARMLAND USE CONTINUES.

    (a) In General.--Part III of subchapter A of chapter 11 of the 
Internal Revenue Code of 1986 is amended by inserting after section 
2033 the following new section:

``SEC. 2033A. EXCLUSION OF CERTAIN FAMILY-OWNED FARMS AND BUSINESSES.

    ``(a) In General.--In the case of an estate of a decedent to which 
this section applies, the value of the gross estate shall not include 
the adjusted value of any qualified family-owned farm or business 
included in the estate.
    ``(b) Estates to Which Section Applies.--This section shall apply 
to an estate if--
            ``(1) the decedent was (at the date of the decedent's 
        death) a citizen or resident of the United States, and
            ``(2) during the 8-year period ending on the date of the 
        decedent's death there have been periods aggregating 5 years or 
        more during which--
                    ``(A) not less than 60 percent of the qualified 
                family-owned farm or business was owned by the decedent 
                and members of the decedent's family, and
                    ``(B) there was material participation (within the 
                meaning of section 2032A(e)(6)) by the decedent or the 
                qualified heir in the operation of such farm or 
                business.
Rules similar to the rules of paragraphs (4) and (5) of section 
2032A(b) shall apply for purposes of subparagraph (B).
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualified family-owned farm or business.--The term 
        `qualified family-owned farm or business' means--
                    ``(A) any qualified farmland, or
                    ``(B) any qualified trade or business.
            ``(2) Qualified farmland.--The term `qualified farmland' 
        means any real property--
                    ``(A) which is located in the United States,
                    ``(B) which is used as a farm for farming purposes 
                (within the meaning of section 2032A(e)), and
                    ``(C) which was acquired from or passed from the 
                decedent to a qualified heir of the decedent and which, 
                on the date of the decedent's death, was being so used 
                by the decedent or a member of the decedent's family.
            ``(3) Qualified trade or business.--The term `qualified 
        trade or business' means any interest in a trade or business of 
        the taxpayer--
                    ``(A) which is not an interest in a C corporation, 
                and
                    ``(B) which was acquired from or passed from the 
                decedent to a qualified heir of the decedent.
            ``(4) Adjusted value.--The term `adjusted value' means the 
        value of the qualified family-owned farm or business for 
        purposes of this chapter (determined without regard to this 
        section), reduced by the amount deductible under paragraph (3) 
        or (4) of section 2053(a).
            ``(5) Other terms.--Any other term used in this section 
        which is also used in section 2032A shall have the same meaning 
        given such term by section 2032A.
    ``(d) Tax Treatment of Dispositions and Failures To Use for Farming 
Purposes.--
            ``(1) Imposition of recapture tax.--If, at any time after 
        the decedent's death and before the death of the qualified 
        heir--
                    ``(A) the qualified heir disposes of any interest 
                in qualified family-owned farm or business (other than 
                by a disposition to a member of his family), or
                    ``(B) in the case of qualified farmland, the 
                qualified heir ceases to use the real property which 
                was acquired (or passed) from the decedent as a farm 
                for farming purposes,
        then, there is hereby imposed a recapture tax.
            ``(2) Amount of recapture tax, etc.--Rules similar to the 
        rules of section 2032A(c) with respect to the additional estate 
        tax shall apply for purposes of this subsection with respect to 
        the recapture tax.
    ``(e) Application of Other Rules.--To the extent provided by the 
Secretary in regulations, rules similar to the rules of subsections 
(e), (f), (g), (h), and (i) of section 2032A shall apply for purposes 
of this section.''
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter A of chapter 11 of such Code is amended by inserting after 
the item relating to section 2033 the following new item:

``Sec. 2033A. Exclusion of certain family-owned farms and 
                            businesses.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to estates of decedents dying after the date of the enactment of 
this Act.
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