The Internal Revenue Service will, upon request, give a ruling of whether or not the level of participation an individual has in a closely held business is sufficient to meet its material participation rules. If the size of commodity holdings are substantial, it is best if the decedent had materially participated in the farm. The value of the gross estate for estate tax purposes is not affected. If the decedent was not considered to be materially participating at the time of death, it may be wise if the personal representative of the estate sold the commodities to pay the outstanding debts of the decedent. The information contained in this NebFact is for educational purposes only.
Tax is complicated and the information presented here has necessarily been simplified.
See a tax consultant for specific questions. Kenneth R. Bolen, Director of Cooperative Extension, University of Nebraska, Institute of Agriculture and Natural Resources.