Page:United States Statutes at Large Volume 111 Part 1.djvu/882

 Ill STAT. 858 PUBLIC LAW 105-34—AUG. 5, 1997 "(i) DEBT-FINANCED PROPERTY.— The term 'debtfinanced property' means any property with respect to which there is an acquisition indebtedness (as defined in clause (ii)) on the date of the decedent's death. "(ii) ACQUISITION INDEBTEDNESS.—The term 'acquisition indebtedness' means, with respect to debtfinanced property, the unpaid amount of— "(I) the indebtedness incurred by the donor in acquiring such property, "(II) the indebtedness incurred before the acquisition of such property if such indebtedness would not have been incurred but for such acquisition, "(III) the indebtedness incurred after the acquisition of such property if such indebtedness would not have been incurred but for such acquisition and the incurrence of such indebtedness was reasonably foreseeable at the time of such acquisition, and "(IV) the extension, renewal, or refinancing of an acquisition indebtedness. "(5) TREATMENT OF RETAINED DEVELOPMENT RIGHT.— "(A) IN GENERAL.— Paragraph (1) shall not apply to the value of any development right retained by the donor in the conveyance of a qualified conservation easement. "(B) TERMINATION OF RETAINED DEVELOPMENT RIGHT.— If every person in being who has an interest (whether or not in possession) in the land executes an agreement to extinguish permanently some or all of any development rights (as defined in subparagraph (D)) retained by the donor on or before the date for filing the return of the tax imposed by section 2001, then any tax imposed by section 2001 shall be reduced accordingly. Such agreement shall be filed with the return of the tax imposed by section 2001. The agreement shall be in such form as the Secretary shall prescribe. "(C) ADDITIONAL TAX. — Any failure to implement the agreement described in subparagraph (B) not later than the earlier of— "(i) the date which is 2 years after the date of the decedent's death, or "(ii) the date of the sale of such land subject to the qualified conservation easement, shall result in the imposition of an additional tax in the amount of the tax which would have been due on the retained development rights subject to such agreement. Such additional tax shall be due and payable on the last day of the 6th month following such date. "(D) DEVELOPMENT RIGHT DEFINED. —For purposes of this paragraph, the term 'development right' megins any right to use the land subject to the qualified conservation easement in which such right is retained for any commercial purpose which is not subordinate to and directly supportive of the use of such land as a farm for farming purposes (within the meaning of section 2032A(e)(5)).

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