FARMER Act of 2013

Bill: 113-hr-1448
Sponsor: full_name: Rep. Scott, Austin [R-GA-8]
Introduced: 2013-04-09
Policy area: Taxation
Subjects: Farmland

Forests, forestry, trees

Transfer and inheritance taxes
Latest action: action_date: 2013-04-09
text: Referred to the House Committee on Ways and Means.

Summaries:
action_date: 2013-04-09
action_desc: Introduced in House
text: <p>Farmers and Ranchers Minimizing Estate Regulations Act of 2013 or the FARMER Act of 2013 - Amends the Internal Revenue Code, with respect to the special use valuation of farms and other property used in a trade or business for estate tax purposes, to: (1) increase to $2 million the allowable reduction in the fair market value of such property for valuation purposes, (2) reduce the required holding period for such property for eligibility and recapture purposes, (3) allow rentals of such property by controlled entities to qualify as a special use, (4) repeal the requirement to use the gross cash rental method for valuing such property, and (5) exempt woodlands subject to a management plan from the additional tax for early dispositions of such property and for failure to comply with special use requirements. </p>

tv_txt: I 113th CONGRESS 1st Session H. R. 1448 IN THE HOUSE OF REPRESENTATIVES April 9, 2013 Mr. Austin Scott of Georgia (for himself, Mr. Broun of Georgia , Mr. Westmoreland , Mr. Rogers of Alabama , Mr. Yoho , Mr. McIntyre , Mr. Kingston , and Mr. Crawford ) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to increase the aggregate reduction in the fair market value of farm, etc., real property under section 2032A to $2,000,000, and for other purposes.

1. Short title This Act may be cited as the Farmers and Ranchers Minimizing Estate Regulations Act of 2013 or the FARMER Act of 2013 . 2. Modifications to alternate valuation of farm, etc., real property (a) Maximum reduction increased to $2,000,000 (1) In general Paragraph (2) of section 2032A(a) of the Internal Revenue Code of 1986 (relating to limitation on aggregate reduction in fair market value) is amended by striking $750,000 and inserting $2,000,000 . (2) Conforming amendment The first sentence of section 2032A(a)(3) of such Code is amended to read as follows: In the case of estates of decedents dying in a calendar year after 2012, the $2,000,000 amount contained in paragraph (2) shall be increased by an amount equal to— (A) $2,000,000, multiplied by (B) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting calendar year 2011 for calendar year 1992 in subparagraph (B) thereof. . (b) Reduction in required holding and use periods of decedent Subparagraph (C) of section 2032A(b)(1) of such Code is amended— (1) by striking 8-year period and inserting 5-year period , and (2) by striking 5 years and inserting 3 years . (c) Reduction in required holding and use periods To avoid recapture (1) In general Paragraph (1) of section 2032A(c) of such Code is amended— (A) by striking 10 years and inserting 5 years , and (B) by striking subparagraph (B) and inserting the following new subparagraph: (B) there have been periods aggregating 3 years or more during which the qualified heir does not use for the qualified use the qualified real property which was acquired (or passed) from the decedent, . (2) Conforming amendment Clause (ii) of section 2032A(c)(7)(A) of such Code is amended by striking 10-year and inserting 5-year . (d) Certain rents from controlled entities treated as qualified Subparagraph (E) of section 2032A(c)(7) of such Code is amended by inserting (or to an entity more than 50 percent (by vote and value) of the equity interests in which are owned directly by members of such family) after descendant . (e) Repeal of use of gross cash rental of comparable land in valuing farms (1) In general Subparagraphs (A) and (B) of section 2032A(e)(7) of such Code (relating to method of valuing farms) are amended to read as follows: (A) In general The value of a farm for farming purposes shall be determined by dividing— (i) the excess of the average annual net share rental for comparable land used for farming purposes and located in the locality of such farm over the average annual State and local real estate taxes for such comparable land, by (ii) the average annual effective interest rate for all new Federal Land Bank loans. For purposes of the preceding sentence, the average annual net share rental computation shall be made on the basis of the 5 most recent calendar years ending before the date of the decedent's death. (B) Net share rental For purposes of this paragraph, the term net share rental means the excess of— (i) the value of the produce received by the lessor of the land on which such produce is grown, over (ii) the cash operating expenses of growing such produce which, under the lease, are paid by the lessor. . (2) Conforming amendment Subparagraph (C) of section 2032A(e)(7) of such Code is amended by striking that there is no comparable land from which the average annual gross cash rental may be determined, and . (f) Effective date The amendments made by this section shall apply to estates of decedents dying after the date of the enactment of this Act. 3. Woodlands subject to management plan (a) In general Paragraph (2) of section 2032A(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph: (F) Exception for woodlands subject to management plan Subparagraph (E) shall not apply to any disposition or severance of standing timber on a qualified woodland if the harvest is— (i) consistent with a written forest management plan developed under the Cooperative Forestry Assistance Act of 1978 ( 16 U.S.C. 2103a ), or an equivalent plan approved by the State Forester, (ii) conducted under the guidance of a qualified forestry professional (as determined by the Secretary in consultation with the United States Forest Service), or (iii) conducted on lands certified to a third-party audited forest certification system or similar land management protocol, as determined by the United States Forest Service. . (b) Effective date The amendment made by subsection (a) shall apply to the disposition or severance of standing timber after the date of the enactment of this Act.