Get Revenue Ruling 2003-53, Special Use Value; Farms; Interest Rates. The 2003 Interest Rates To Be

$1.31 million Rather than having to value farm real property at market or development value, 2032A allows qualified family farms and ranches to elect a lower value based on a few specified formulas. The reduction in value is capped at $1.31 million for 2023. Proposed bill would increase exemption for estate taxes farmprogress.com https://.farmprogress.com › management › propose... farmprogress.com https://.farmprogress.com › management › propose...

Section 2032A of the Internal Revenue Code (IRC) permits certain real property to be valued for Federal estate tax purposes on the basis of its “current use” rather than its “highest and best use.” This commonly is termed “special use valuation.” Real property may qualify for special use valuation if it is located in ...

(1) Qualified heir The term “qualified heir” means, with respect to any property, a member of the decedent's family who acquired such property (or to whom such property passed) from the decedent. Definition: qualified heir from 26 USC § 2032A(e)(1) cornell.edu https://.law.cornell.edu › definitions › uscode cornell.edu https://.law.cornell.edu › definitions › uscode

Special use valuation cannot reduce the fair market value of the gross estate by more than $750,000, as adjusted for inflation since 1999; for 2008 the limit is $960,000. If the forest land in question (and other qualified property) was owned by both spouses, the limitation applies separately to each estate. Chapter 12 Special Use Valuation - National Timber Tax National Timber Tax https://.timbertax.org › publications › Cha... National Timber Tax https://.timbertax.org › publications › Cha... PDF

Generally, the special-use value of property that is used for farming purposes is determined in both of the following ways: Subtract the average annual state and local real estate taxes on actual tracts of comparable real property from the average annual gross cash rental for that same comparable property.

The 2032A provision in the IRC allows farmers to value their land at agricultural value, rather than fair market value. However, the current law limits the deduction to $1.16 million. This relatively small deduction can limit the usefulness of 2032A for some farm estates.

Special use valuation under the provisions of Iowa Code chapter 450B is in lieu of valuing the real estate at its fair market value in the ordinary course of trade under Iowa Code section 450.37. The valuation of real estate at its special use value must be made on the entire parcel of the real estate in fee simple. IAC Ch 86, p.1 701—86.8 (450B) Special use valuation. 86.8(1) iowa.gov https://.legis.iowa.gov › docs › iac › rule › 10-30-2... iowa.gov https://.legis.iowa.gov › docs › iac › rule › 10-30-2...