Court Opinion

ID: 9483408
Source: CourtListenerOpinion
Date Created: 2023-08-05 09:19:41.370772+00
Date Added: 2024-06-11T17:49:36.823422
License: Public Domain

REINHARDT, Circuit Judge,
dissenting:
This is a difficult case. Tax statutes are notoriously complex, a fact that makes tax lawyers wealthy and the resolution of appeals of taxation issues exceptionally difficult. The quandary in which we find ourselves today is also at least partially the result of the fact that, as my colleagues acknowledge, the rules that govern such matters are often arbitrary and make little sense as applied to particular “cases and controversies”.
Harvey Williamson farmed the land at issue here prior to the death of Elizabeth Williamson, his grandmother. Upon her death, he continued to farm the land, although the land was now owned by Beryl Williamson, Elizabeth’s son and Harvey’s uncle. The same person farmed the land— and it remained a “family farm” — both before and after Elizabeth’s death. The “special use valuation” was enacted by Congress during our nation’s Bicentennial in order to keep the family farm, an all-too-rapidly-vanishing remnant of our nation’s rural past, alive and well in our complex modern economy. My colleagues now hold that this provision protects Harvey’s use of the land only while it is owned by his grandmother, not while it is owned by his grandmother’s son, Harvey’s uncle. My colleagues reach the result they believe is compelled by the provisions of á cumbersome tax statute; they do not defend the rationality of that result. I cannot quarrel with my colleague’s good faith or sincerity: their exhaustive research and detailed analysis of this complex matter of law is readily apparent. The fault lies in Congressional draftsmanship, not in judicial reasoning. The conclusion my colleagues reach is a defensible one given the hodge-podge statutory structure and the type of analysis we are required to perform. I believe, however, that there is a different and preferable conclusion that we can and should reach— one that is more plausible and more in accord with both the statutory language and purpose. Accordingly, and with deference, I dissent.
The resolution of the issue of first impression that we have the dubious privilege of adjudicating requires us to track the convoluted language of . 26 U.S.C. § 2032A — a statute that contains virtually innumerable sub-parts (including, among others, the almost indecipherable § 2032A(c)(2)(E)(ii)(II) and § 2032A(e)(7)(B)(ii)(I)), and that comprises a full nine pages of exceptionally small text in the supplement to the United States Code Annotated. See 26 U.S.C. § 2032A (West Supp.1992). Fortunately, Congress has wisely seen fit to engage in almost no discussion or debate over the relevant portions of that statute such as would ordinarily form the basis for its “legislative history”; instead, we are left to glean what we can in that department solely from the sage advice of the staffers who have creat*1537ed the legislative reports regarding its enactment. See generally 1976 U.S.C.C.A.N. 2897, 2897-4284 (indicating that the selected legislative history of the Tax Reform Act of 1976, of which § 2032A was a part, comprises over 1300 pages of text of, of course, excruciatingly small print).
Despite the Herculean nature of our task, the plain language of the statute is revealing, and in the end, after extensive analysis, may be seen to conflict squarely with the seemingly reasonable interpretation given it by the majority. The first step in our analytical process is to determine whether the land in question qualified for special use valuation under § 2032A as of the time of Elizabeth Williamson’s death. To so qualify, the Williamson’s farm must have been “real property located in the United States 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 used for a qualified use by the decedent or a member of the decedent’s family....” 26 U.S.C. § 2032A(b)(1).
It helps to take that sentence in parts. First, the Williamson’s farm was and is real property located in the United States.
Second, the farm passed from Elizabeth Williamson, the decedent, to Beryl Williamson.
Third, Beryl was and is a qualified heir of Elizabeth. Section 2032A(e)(l) defines a “qualified heir” as “a member of the decedent’s family”. Section 2032A(e)(2) defines a “member of the family” as including, among others, “an ancestor of such individual ... [or] a lineal descendant of such individual.” Beryl is therefore a “qualified heir” because he is Elizabeth’s son.
Fourth, on the date of the decedent’s (Elizabeth’s) death, the Williamson’s property was being used for a qualified use by a member of the decedent’s family.1 On the date of Elizabeth’s death, the property was being used by Harvey Williamson as a farm: that use clearly is a “qualified use”, as § 2032A(b)(2) defines “qualified use” as (among other things) “the devotion of the property to ... use as a farm for farming purposes.” Harvey is a “member of [Elizabeth’s] family”: he is her grandson, and § 2032A(e)(2)’s definition of “member of the family” includes “a lineal descendant” of Elizabeth. Hence, on the date of Elizabeth’s death, the farm was being used for a qualified use by a member of the decedent’s family.2
Put together, the Williamson's property was “real property located in the United States which was acquired from or passed from the decedent to a qualified heir of the decedent and which, on the date of the decedents death, was being used for a qualified use by the decedent or a member of the decedent’s family” as required by 28 U.S.C. § 2032A(b)(1). No other section of § 2032A is relevant to this conclusion: not the rest of § 2032A(b)(1),3 not § 2032A(c) (“Tax treatment of dispositions and failures to use for qualified use”),4 not even the exotic § 2032A(e)(13) (“Special rules for woodlands”). Accordingly, when the land passed from Elizabeth to her son Beryl (the “qualified heir”), it was “qualified real property” and thus entitled to the benefit of the special use valuation provided by § 2032A — even though (or perhaps be*1538cause) it was actually farmed by Harvey (Elizabeth’s son and Beryl’s nephew) at all times.
Given the above, it would be surprising indeed if the property nevertheless became subject to the “recapture tax” provided by that section while Harvey continued to farm the land. After all, nothing of any significance changed: the property was “qualified real property” under § 2032A(b) when Elizabeth owned it as well as when Beryl owned it, Beryl was a qualified heir, and both the actual use and the actual user of the property remained the same at all times.5 Contrary to the conclusion reached by my colleagues, I believe that the clear language of § 2032A necessitates a holding that the property is not subject to the recapture tax so long as Beryl owns it and Harvey continues to farm the land.
The “recapture tax” is imposed by § 2032A(c)(l). That provision states, in relevant part, that the tax is imposed:
(1) If, within 10 years after the decedent’s death and before the death of the qualified heir—
(A) the qualified heir disposes of any interest in qualified real property (other than by disposition to a member of his family), or
(B) the qualified heir ceases to use for the qualified use the qualified real property which was acquired (or passed) from the decedent....
The majority and the Tax Court believe that the imposition of a recapture tax is required by subsection (1)(B).6 The crucial question, then, is this: for purposes of subsection (1)(B), what constitutes the “qualified heir ceaspng] to use [the property] for the qualified use”?
Section § 2032A(c)(6) explicitly answers that precise question. I note first, should there be any doubt, that subsection (1)(B) applies exclusively to a qualified heir’s cessation of use of qualified property. No other person’s cessation of use of property is defined by that section. Therefore, a definition of what constitutes a cessation of use for purposes of subsection (1)(B) is necessarily a definition of when a qualified heir ceases to use qualified property for a qualified use. That definition is set forth in section 2032A(c)(6).7 Under that section, the answer to what constitute’s a qualified heir’s cessation of qualified use is as follows:
For purposes of paragraph (1)(B) real property shall cease to be used for the qualified use if—
(A) such property ceases to be used for the qualified use set forth in subpara-graph (A) or (B) of subsection (b)(2) under which the property qualified under subsection (b), or
(B) during any period of 8 years ending after the date of the decedent’s death and before the date of the death of the qualified heir, there had been periods aggregating more than 3 years in which—
(i) in the case of periods during which the property was held by the decedent, there was no material participation by the decedent or any member of his family in the operation of the farm or other business, and
(ii) in the case of periods during which the property was held by any qualified heir, there was no material participation by such qualified heir or any member of his family in the operation of the farm or other business.
*1539In other words, a qualified heir (here, Beryl) does not cease to use the real property for a qualified used unless one of the two provisions of subsection (c)(6) is applicable.
The final step in our analysis, then, is to determine whether Beryl ceased to use the qualified property for a qualified use under any of the tests set forth in subpart (A) or (B) of subsection (c)(6). The answer to that question seems reasonably evident. Under subpart (A) of subsection (c)(6), the property in question continued to be used “as a farm for farming purposes”, the qualified use for which it initially qualified at the time of Elizabeth’s death. Hence, the property never “cease[d] to be used for the qualified use set forth in subparagraph (A) or (B) of subsection (b)(2).” Thus, subpart (A) of subsection (c)(6) does not apply and cannot serve as the basis for a determination that Beryl ceased to use the qualified property for a qualified use.
Similarly, there was clearly no cessation of use for a qualified use under subpart (B); indeed, neither subparagraph (i) nor subparagraph (ii) of that subpart is even remotely applicable. These subsections provide that a cessation of qualified use occurs when there is no longer any material participation in the farming by the heir (or decedent) or any member of his or her family. Here, at all relevant times, Harvey operated the farm. That, beyond question, is “material participation,”8 — and it is material participation by a member of the family. To be absolutely clear, for purposes of subpart (B)(i), during the entire relevant period in which the Williamson property was owned by Elizabeth, Harvey farmed the land. Thus, there was material participation in the operation of the farm by Harvey, who was “the decedent or any member of his [Elizabeth’s] family.” Similarly, for purposes of subpart (B)(ii), during the entire relevant period in which the Williamson property was owned by Beryl, Harvey farmed the land. Thus, there was material participation in the operation of the farm by Harvey, who was “such qualified heir or any member of his family.”9 Thus, as 26 U.S.C. § 2032A(c)(6) makes unambiguously clear, Harvey’s continued operation of the farm for farming purposes precludes any determination that there was a cessation of use by the qualified heir (Beryl) under 26 U.S.C. § 2032A(c)(l)(B). Hence, neither subsection (c)(1)(A) nor (c)(1)(B) is applicable, and no recapture tax may be imposed.10
*1540As I see it, the language of the statute— although difficult to follow — is, upon proper analysis, ultimately clear, and properly resolves this appeal. The text of § 2032A, when all of its sub-parts are read together and in light of each other, establishes a rational statutory scheme and the application of that scheme here achieves a result that best effectuates the purposes of the statute and is fully consonant with the Congressional objectives. Under such circumstances, we need go no further in order to resolve the appeal. See United States v. Ron Pair Enterprises, 489 U.S. 235, 240-42, 109 S.Ct. 1026, 1029-31, 103 L.Ed.2d 290 (1989) (plain language generally is determinative).
Because I believe that it is not necessary to go beyond the statutory language and purpose in order to derive the statute’s meaning, I need not address my colleagues’ use of methods of analysis that are applicable under other circumstances. Nor need I address their rejection of the alternative argument advanced by Williamson. However, parts of the majority opinion merit comment, as does Williamson’s contention.
Initially, I believe that my colleagues fail to recognize that the statute requires only that the “qualified use” be performed by a family member, and not that the family member who farms the land must be the same family member who inherited the property. The confusion is understandable, but I believe that the language of the statute is clear in this regard. Subsection (e)(1) states that the recapture tax is imposed when the qualified heir ceases to use the property for a qualified use, and subsection (c)(6) — which defines how subsection (c)(1) shall be construed — clearly states that the qualified heir continues to use the property for a qualified use as long as he owns the property and a member of his family farms the land. See supra at 1539 & n. 9. It is not, as the majority seems to believe, Beryl’s use of the property (a “cash lease”) that must constitute farming in order for the special use valuation established in § 2032A to apply; as long as a member of his family actively farms the property, Beryl’s qualified use exemption does not terminate. Thus, the property is “qualified real property” under § 2032A(b) not because Beryl used it in a particular way, but because Harvey (“a member of [Elizabeth’s] family”) was using it as a farm (a “qualified use”) at the time of Elizabeth’s death and because Harvey (“a member of [Beryl’s] family”) continued to use it for that purpose after her death. Indeed, the focus is justifiably on Harvey’s use, not Beryl’s. That focus makes sense: as long as a statutorily-defined family member continues to farm the family-owned property (and ownership remains in the family), the rationale for the special valuation provisions (to keep the family farm economically viable) is applicable and the provisions of § 2032A apply.
The statutory language and structure are far more easily understood when read in light of the policies sought to be advanced by the special valuation provisions of § 2032A. Section 2032A is designed to assist the family farmer; in that statute, Congress recognized that small, family farms are often owned by an older family member and actively cultivated by the younger generation. These are the farms that § 2032A is designed to assist. When the older family member dies, the recapture tax provisions do not apply as long as the farm “stays in the family”. The farm can “stay in the family” — even if the new owner is unable or unwilling to actually farm the land himself. In such case, the recapture tax can be avoided in one of three ways. First, the qualified heir can “materially participate” in the operation of the farm himself. See 26 U.S.C. § 2032A(c)(6)(B)(ii) (no recapture tax when the qualified heir materially participates in the operation of the farm); see also infra at 1540-41 (discussing crop-share lease as material participation). .Second, the qualified heir can “keep the farm in the family” and avoid the recapture tax by disposing of the property to another family member; e.g., by giving or selling the property to a member of his family. See 26 U.S.C. § 2032A(e)(1) (disposal to family member makes recipient new “qualified heir”); see also 26 U.S.C. § 2032A(c)(1)(A) (explicitly exempting disposals “to a member of his *1541family” from the category of disposals that impose the recapture tax). Finally, he can retain ownership of the land but not materially participate in farming it himself as long as a member of his family actively farms the land and thereby “keeps the farm in the family”. See 26 U.S.C. § 2032A(c)(6)(B)(ii) (no cessation of qualified use as long as a member of the family materially participates in the operation of the farm).
The statutory structure described above fulfills the policy rationale behind the enactment of § 2032A: to assist in the preservation of family farms. Here, Beryl has chosen the third route — leasing the land to a younger family member who actively farms it; the farm has remained wholly within the family and is being used as a family farm. The language, structure, and purpose of § 2032A make it clear that the recapture provisions do not apply in such circumstances. To hold, as the majority necessarily does, that a recapture tax, would not accrue if Beryl gave or sold the land to Harvey, but that the tax applies because Beryl leased it to him instead, makes no sense, statutorily or otherwise, and is inconsistent with both the statutory language and purpose.
The majority’s conclusion is driven by its concentration on the irrelevant circumstance that the lease between Beryl and Harvey is a “cash lease” rather than a “crop-share” lease. The distinction between these two forms of lease is relevant only when the lessee is an unrelated third party — not when he is a family member as defined in the statute. Section 2032A does not preclude special use valuation merely because the owner of the property does not actively farm the land and instead enters into a cash lease with a family member. There is no dispute that the Williamson’s land would have been qualified real property subject to the special use valuation regardless of whether Elizabeth’s lease with Harvey was a crop-share lease (as it actually was) or a cash lease (the form of lease into which Beryl and Harvey later entered). See 26 U.S.C. § 2032A(b)(1); 26 U.S.C. § 2032A(c)(6)(B)(ii); Martin v. C.I.R., 783 F.2d 81, 84 (7th- Cir.1986). The same is true with respect to the lease with Harvey entered into by Elizabeth’s heir, Beryl.
Congress frowned on cash leases and subjected such agreements to a recapture tax only when the lease was with a non-family member. In such situations, the owner of the land, the only family member involved, becomes in fact a mere passive investor and hence is legitimately excluded from taking advantage of the special valuation provisions of § 2032A because there is wo family member engaged in active farming. Here, however, Beryl’s cash lease with Harvey is a cash lease with a family member. See 26 U.S.C. § 2032A(e)(2). Under a cash lease with a family member, a family member continues to actively participate in the farming activity. That is what Harvey did here. The fact that the active participant was Harvey (the family member) not Beryl (the heir) is immaterial for purposes of § 2032A, which specifically provides that cessation of qualified use occurs only when there is no material participation by the heir (or decedent) or any member of his or her family. See supra at 1539.
True, a crop-share lease (unlike a cash lease) would have avoided the recapture tax provisions even if the lease had been granted to an unrelated third party. That is because under a crop-share lease, “part of the risk of farming — remain[s] on the heirs rather than being totally shifted to the lessee.” Martin, 783 F.2d at 84. An heir’s retention of the risk under the terms of a crop-share lease qualifies as “material participation’! in farming by the heir. See id. Thus, there is no “cessation of use” under subsection (c)(1)(B) in the case of a crop-share lease regardless of who the lessee is. However, as noted earlier, subsection (c)(6)(B)(ii) makes clear that material participation by the qualified heir (by way of crop-share lease or otherwise) is only one way to preclude imposition of the recapture tax. It is not necessary that the qualified heir himself materially participate in the operation of the farm so long as a member of his family so participates. Section 2032A does not require an heir who wishes to lease the farm he inherits to *1542enter into a crop-share lease and be subjected to the “risks” of farming himself— i.e., to assume the risks involved in leasing on a crop-share basis — he may, instead, lease the land to a member of his family under a cash lease as long as that family member actively farms the land. The reason that a cash lease to a family member does not terminate the “qualified use” is, of course, that the risk of any farming loss remains with a family member, the cash lessee. Only if the cash lease is with a non-family member, and thus the entire risk of farming is borne by a third party, does the qualified use terminate under the statute. Thus, while the majority correctly identifies the fact that Congress was concerned about cash leases and “passive” farming, it fails to recognize that Congress’s concerns apply only when the cash lease is with a non-family member — only when the family that owns the family farm is engaged in passive farming, not just the heir.
The distinction between cash leases between family members and cash leases between non-family members is clearly demonstrated by each of the cases relied upon by the majority: each involved a lease with a non-family member. None, therefore, supports the majority’s position that a lease with a family member subjects the property to a recapture tax; indeed, the language of the opinions relied upon by the majority suggests that, in direct opposition to the majority’s view, the recapture tax is applicable only when the lease is with a non-family member. In Martin v. C.I.R., 783 F.2d 81 (7th Cir.1986), the qualified heir entered into a cash lease with the highest bidder; in that case, a corporation, not a member of his family. See id. at 82. In Schuneman v. United States, 783 F.2d 694 (7th Cir.1986), the landowner entered into a cash lease with her neighbor, who was not related to her. See id. at 695-96. In Brockman v. C.I.R., 903 F.2d 518 (7th Cir.1990), the landowner leased the property “to James Dickison, an unrelated neighbor”. Id. at 520. In Heffley v. C.I.R., 884 F.2d 279 (7th Cir.1989), there was no material participation in the farm by any member of the landowner's family. See id. at 282 (noting Tax Court finding that “neither [the owner] nor a member of her family had materially participated in operating the farm”); id. at 284 (holding that special use valuation is unavailable when “the farmland was leased on a fixed-price basis to an outsider”) (emphasis added). And in Estate of Sherrod v. Commissioner, 114, F.2d 1057 (11th Cir.1985), cert. denied, 479 U.S. 814, 107 S.Ct. 66, 93 L.Ed.2d 24 (1986), the property was held not to be entitled to special use valuation because it was “rented to an unrelated party”. Id. at 1059 (emphasis added); see also id. at 1064 (noting that lease was with “unrelated tenant” and “unrelated party”). These cases are therefore inapplicable here; indeed, by repeatedly mentioning the fact that the cash leases were with “unrelated” individuals, they substantially strengthen the view that what is relevant is not whether there is a cash lease, but whether the cash lease is with an unrelated party or a family member.
I believe that my colleagues’ failure to recognize the distinction between cash leases with family members and cash leases with non-family members is created in part — perhaps understandably — by the incomplete legislative history that has accompanied the subsequent amendments to § 2032A. The majority persuasively identifies Congress’ desire that a new owner who merely rents his farm on a cash lease basis to a non-family member (e.g., IBM or American Harvester) should not be permitted to take advantage of the special valuation provisions contained in § 2032A designed to protect the economic viability of the family farm. See Opinion at 1527-29. However, the legislative history isolated by my colleagues did not mention, did not intend to cover, and did not contemplate the situation presented here: a situation in which a decedent leased her property to a member of her family and that family member continued to farm the property under a cash lease with the new family member owner. When the relevant condition is isolated — the fact that the cash lease is to a family member — the proper resolution of this appeal becomes clear. Com*1543pare Opinion at 1527 (“ ‘The mere passive rental of property will not qualify.’ ”) (quoting House Report) with 26 C.F.R. § 20.2032A-3(b)(1) (“The mere passive rental of property to a party other than a member of the decedent’s family will not qualify.”) (emphasis added). In any case, the legislative history does not answer the question raised in Williamson’s appeal; in stark contrast, the plain language of § 2032A (and perhaps of the regulation) does. Thus, while my colleagues insist that “[i]f Congress intended to authorize a larger class of intra-family leases, it should have said so,” Opinion at 1532, their focus on snippets of legislative history causes them to overlook the fact that Congress explicitly (although in a convoluted fashion) did say so in § 2032A.
I also believe that my colleagues mistakenly focus on the piecemeal amendment of the statute rather than its plain language as it exists now. The present case does not involve a cash lease from the decedent [Elizabeth] to a family member, see Opinion at 1528, or testamentary passage of the farm to the decedent’s surviving spouse, see Opinion at 1529: the 1981 and 1988 Amendments are therefore largely irrelevant to this case. To the degree they are relevant, they support a finding contrary to the one made by my colleagues. For example, the 1981 amendment changed subsection (b)(l)’s requirement that the land, “on the date of the decedent’s death, [] be[] used for a qualified use” so that subsection (b)(1) was satisfied as long as the land, “on the date of the decedent’s death, [ ] be[ ] used for a qualified use by the decedent or a member of the decedent’s family.” To me, that change reaffirm^ Congress’ intent that the special valuation provisions of § 2032A apply whenever a family member — not just the decedent or the new owner of the land — farms the land both prior and subsequent to the death of their landowning relative.11
Finally, while I believe that the proper result in this case is achieved by a close reading and analysis of the language of subsections (c)(í) and (c)(6), there may be an alternate statutory basis for that same result. Specifically, I am unpersuaded by the majority’s answer to Beryl’s contention that when he leased the property to Harvey, Harvey became the “qualified heir” pursuant to 26 U.S.C. § 2032A(e)(l) and hence that the recapture tax does not apply because he, the (new) qualified heir, continued to farm the land. Subsection (e)(1) states that “[i]f a qualified heir disposes of any interest in qualified real property to any member of his family, such member shall thereafter be treated as the qualified heir with respect to such interest.” My colleagues insist that the term “disposes of any interest” means the permanent loss or renunciation of an interest and that a leasehold interest does not qualify. See Opinion at 1534-35. I find that answer unsatisfactory for three reasons. First, the statute explicitly refers to the release of “any interest” in the land: it is clear that a leasehold is an interest in the land,12 and the plain language of subsection (e)(1) would thus seem to apply to the conveyance of both leasehold interests and more perma*1544nent interests in the land. Second, a lease for a term of years •permanently renounces the owner’s right to occupy the land for the lease period: because the owner has no right to enter the land as long as the lease is valid, the conveyance of a leasehold would seem to qualify even under the majority’s restrictive interpretation of subsection (e)(1). Finally, my colleagues’ belief that one cannot “dispose” of a leasehold interest is not only unsupported by precedent or authority, but is actually contradicted by such sources. See Rider v. Cooney, 94 Mont. 295, 23 P.2d 261, 263 (1933) (“[T]he leasing of the lands of the state for a term of years is the disposal of an interest or estate in the lands_”). For those reasons, although I need not rely on the subsection (e)(1) argument, I find much to be said in its defense.13
Although I have numerous difficulties with my colleagues’ resolution of Williamson’s appeal, I recognize that there are two sides to the argument. The statute is complex and difficult to follow: the legislative history, far from simplifying matters, only makes things worse. It may well be that the result my colleagues reach is not, as a matter of statutory construction, an unreasonable one. However, based upon my reading of § 2032A, I believe that the language of the statute requires a contrary conclusion — and that the result I reach is more rational, more consistent with the statutory structure and purpose, and more just to family farmers. Clearly, Congress could not have intended the result the majority reaches here.
Accordingly, I respectfully dissent.

. See also infra at 1537 n. 2.

. It may also be true that, at the time of her death, "the decedent” (Elizabeth) was using the farm "for a qualified use", as she had entered into a crop-share agreement with Harvey, who was farming the land, and § 2032A(b)(2) requires only that the property be utilized in some economic capacity (as opposed to a residence or fallow land). See 26 U.S.C. § 2032A(b)(2) (“For purposes of this section, the term ‘qualified use’ means the devotion of the property to any of the following: (A) use as a farm for farming purposes, or (B) use in a trade or business other than the trade or business of farming.”). However, I need not rely on that interpretation— however reasonable — and hence I choose not to unnecessarily complicate matters that are complicated enough already.

. Sections 2032A(b)(1)(A), (B), and (C) require that the qualified use “by a decedent or a member of the decedent’s family” have persisted for a specific period of time prior to the decedent’s death and that a certain percentage of the property have been used for that qualified use. It is clear, and my colleagues do not dispute, that those requirements were met here.

. See infra at 1538-40.

. The majority relies heavily on a change from a crop-share lease to a cash lease. However, as I will explain later, that change is of no consequence for purposes of § 2032A(c)(1)(B), the controlling provision in this case. See infra at 1540-43.

. Subsection (A) provides no basis for the imposition of a recapture tax here because even if a disposition of the property occurred, it was disposed of to a family member; such dispositions are explicitly exempted in subsection (A). Neither the majority nor the Tax Court could or does argue to the contrary.

.In other words, the cessation of qualified use described in subsection (c)(6) can only occur as it relates to the qualified heir. In addition, the fact that subpart (B)(ii) of subsection (c)(6) explicitly discusses cessation of material participation by the qualified heir further strengthens the conclusion that subsection (c)(1) is satisfied when and only when the conditions in subsection (c)(6) are met.

. "Material participation” is determined for purposes of § 2032A “in a manner similar to the manner used for purposes of paragraph (1) of section 1402(A) (relating to net earnings from self-employment).” 26 U.S.C. § 2032A(e)(6). There is no question — and no party here disputes — that Harvey’s active, personal farming of the property constituted "material participation” as that term is used in § 2032A.

. In the context of subparagraph (e)(6), it appears that the reference to "his family” in sub-part (B)(ii) may have been intended to mean the same thing that the reference to "his family” in subpart (B)(i); i.e., the decedent's family. Intentionally or not, however, subpart (B)(ii) contains the terms "such qualified heir” immediately before "any member of his family": grammatically, “his family” therefore refers to the family of the qualified heir.
Fortunately, however one interprets the reference to "his family” in subpart (B)(ii) — as either Elizabeth's family or Beryl’s family — it is clear that Harvey qualifies, as he is a member of both Elizabeth and Beryl’s family. He is Elizabeth’s grandson: he therefore is a member of her family. See 26 U.S.C. § 2032A(e)(2) (“The term ‘member of the family’ [includes], with respect to any individual, ... a lineal descendant of such individual.’’). Harvey is also Beryl’s nephew — his mother’s grandson. He therefore is a member of Beryl’s family because § 2032A(e)(2) provides that "[t]he term ‘member of the family’ [includes], with respect to any individual, ... a lineal descendant ... of a parent of such individual." Stunningly, the definition of "one’s family” in subsection (e)(2) comports with common notions what "one’s family” contains — generally, grandmothers, uncles, grandsons, and nephews are included.

.Contrary to my colleague’s suggestion, subsection (c)(6)(A) does not “incorporate into its definition subsection (c)(1)(B).” Opinion at 11. To the contrary, the former explicitly defines the latter, not the other way around. See 26 U.S.C. § 2032A(c)(6) ("For purposes of paragraph [ (c) ](1)(B), real property shall cease to be used for the qualified use if_”). To say, as the majority does, that subsection (c)(6) does not “modify” subsection (c)(1), see Opinion at 1530, is — with all due respect — to misstate the question and guarantee an incorrect answer to the underlying issue. It is evident what subsection (c)(6) does with respect to subsection (c)(1). If defines, explains, and limits it: nothing more, nothing less.

. Nor does the proper interpretation of § 2032A "render the 1981 and 1988 amendments meaningless surplusage". The 1981 amendment would remain necessary to indicate that the qualified use is judged either by the use of the land by the decedent or a member of the decedent’s family (not just the decedent). The 1988 amendment would remain necessary in situations where the land passes — unlike here— through the hands of a surviving spouse after the property was established as "qualified real property” on the basis of the use of the property by the surviving spouse's husband when he was alive. In addition, the 1988 amendment is necessary to ensure that the recapture tax is not imposed when property passes from a decedent to a surviving spouse and the surviving spouse arranges for the land to be farmed by a member of her family who is not a family member of her spouse.

. See, e.g., Harbel Oil Company v. Steele, 83 Ariz. 181, 318 P.2d 359, 361 (1957) ("A leasehold estate for a term of years is an interest in land capable of being transferred.”); Callahan v. Martin, 3 Cal.2d 110, 118, 43 P.2d 788, 792 (1935) ("[A]n operating lessee under a lease for a term of years ... has an interest or estate in real property_”); see also Williams v. Jones, 326 So.2d 425, 433 (Fla.1975) (”[I]t is well-established that a valid lease for a term of years is a conveyance of an interest in land.”) (emphasis added) (citation omitted).

. Parenthetically, I note that if Beryl's cash lease to Harvey "dispose[d] of any interest in qualified real property” under subsection (e)(1), that fact would not subject the property to a recapture tax under subsection (c)(1)(A), see supra at 1538, because that subsection explicitly excludes dispositions to family members. See supra at 1538 n. 6.