Increase

sented $100,000 $120,000 $125,000 $150,000 $180,000 $185,000 $200,000

Extension

COMPARISON OF MAJOR FEATURES OF ESTATE AND GIFT TAX LEGISLATION INTRODUCED IN THE U.S. HOUSE OF REPRESENTATIVES DURING
THE 94TH CONG., AS OF FEB. 23, 1976-Continued

Reduction in valuation
of property in estate

of

sec. 6166

gration
of estate
and gift

deferral

Increase in marital
deduction:

Valued

Reduced
by

provision, Changes

increase

estate

H.R.

repre

exemp

tax

No.

sented $100,000 $120,000 $125,000 $150,000 $180,000 $185,000 $200,000

tion systems $100,000+ $240,000+

at exist- covenants ing use

on use

years
payments

tax
rates

1 Includes in gross estate: proceeds of life insurance; repeals 5 percent revisionary interest test
on transfers taking effect at death.

Credit against tax for interests, tax applicable to closely held business.

Act of 1969.
Modification of treatment of a change in will or trust instrument, for purposes of the Tax Reform

Exemption equal to the lesser of (1) $200,000, or (2) "The value of the decedent's interest in a
family farming operation continually owned by him or his spouse during the 5 years prior to the date
of his death and which passes or has passed to an individual or individuals related to him or his
spouse."

Increases estate tax exemption to $60,000 for nonresident noncitizen.

Provides for contributions or alternatives to tax; establishes World Peace Tax Fund.

7 Provides for spouses services to be considered in qualifying for an exclusion on jointly held property.

• Provides for transfer to nonprofit cemetery company.

Amends sec, 2055(e) with respect to the estate tax deductions for charitable contributions. 10 Increases estate tax exemption to $100,000 for nonresident noncitizen.

11 Exempts a trust established by a taxpayer for the purpose of providing care for certain mentally incompetent relatives of the taxpayer.

13 Additional tax on transfer to generation skipping trust,

13 Disallowance of certain double deductions.

14 Changes treatment of amounts paid from an estate as an allowance or award for the support of the decedent's surviving spouse or children.

15 In 3 stages: to $80,000 in 1976, $100,000 in 1978, and $120,000 in 1980.

PROPOSALS TO ALLOW CERTAIN REAL PROPERTY TO BE VALUED ACCORDING TO ITS EXISTING USE RATHER THAN ITS

FAIR MARKET VALUE FOR ESTATE TAX PURPOSES

Definition of qualifying real property

"Real property substantially all of which is, and, for 60
mo preceding the date of death of the decedent, has
been devoted to (A) farming, (B) woodland, (C) open
space, (D) any use: provided that the property is
listed in the National Register of Historic Places.

Same as H.R. 432_

Same as H.R. 432 except property listed in National
Register of Historic Places is excluded. Also limited
to scenic" open space.

H.R. 3091..

Same as H.R. 432.

H.R. 5596.

Same as H.R. 432.

H.R. 7768.

Revocation of election and recapture

If (1) land is converted to a nonqualifying use or, (2)
rezoned (at request of owner) to permit a nonqualify-
ing use, or (3) removed from the National Register of
Historic Places; then the excess of tax liability based
on market valuation over liability based on qualifying
use violation must be paid plus 6-percent interest.
Same recapture provisions are activated if owner sells
an interest in property with respect to which election
was made. TYGO

Same as H.R. 432, except interest rates on recapture set
by Internal Revenue Code, sec. 6621.

If property is "sold or transferred, within 5 yr after the
date on which the return was filed" or "is converted
substantially to a (nonqualifying) use,'
" then re-
capture provisions are activated. No interest pay-
ments required.
Same as H.R. 536.
Same as H.R. 432.

Same as H.R. 432 except property listed in National If (1) land is converted to a nonqualifying use, or (2)
Register of Historic Places is excluded.

rezoned to permit a nonqualifying use. If owner sells an interest in property with respect to which election was made. No interest is required. If credit is taken, lien is placed on qualified property.

Definition of qualifying real property

Same as H. R. 1793.

Same as H.R. 432 except that (D) limited to "main-
tenance of historic values and is listed in the Na-
tional Register of Historic Places.'
Same as H. R. 1793.

Same as H.R. 432.

If (A) during the preceding 60-mo period 70 percent or
more of decedent's adjusted gross income was attrib-
utable to real property which (i) is inc'uded in
estate, and (ii) was used for farming throughout such
60-mo period, and (B) the value of the property does
not exceed $500,000.

Same as H.R. 1793. Valued by formula: average gross
cash rental less State and local real estate taxes for
comparable land divided by average interest rate of
all new Federal land bank loans for 3-yr period.
Only farming or scenic open property. (Any covenant or
condition which effectively prevents the property
from being used for any other purpose for any period
of time shall be taken into account.)

Revocation of election and recapture

Same as H.R. 1793.

Same as H. R. 432 limited to 5 yr. If credit is taken, lien
is placed on qualified property.

If property is "sold or transferred to nonrelated indivi-
dual, within 5 yr after due date of return" or "is con-
verted substantially to a (nonqualifying) use," tax to
be redetermined by the Secretary in accord with In-
ternal Revenue Code, sec. 2032. 3-yr statute of limita-
tions imposed after 5-yr provision.

Same as H.R. 432. Rate of interest computed under
Revenue Code sec. 6621. If credit is taken lien is
placed on qualified property.

If property is (A) sold or transferred to nonrelative
individual within 5 yr after return filed; or (B) used
predominantly other than for farming within such 5-
yr period; or (C) has nonfarm adjusted gross income
in excess of $15,000 for the year in which decedent
dies or any of the next 4 taxable years. No interest is
imposed.

Same as 1793.

None.

Study of
additional
steps
toward
preserving
independ-
ence of farm
and family
businesses