Page:United States Statutes at Large Volume 95.djvu/335

 PUBLIC LAW 97-34—AUG. 13, 1981

95 STAT. 309

"(A) any interest in qualified exchange property shall be treated in the same manner as if it were a portion of the interest in qualified real property which was exchanged, "(B) any tax imposed by subsection (c) by reason of the exchange shall be treated as a tax imposed on a partial disposition, and (C) paragraph (6) of subsection (c) shall be applied by treating material participation with respect to the exchanged property as material participation with respect to the quedified exchange property. "(3) QUALIFIED EXCHANGE PROPERTY.—For purposes of this subsection, the term 'qualified exchange property' means real property which is to be used for the qualified use set forth in subparagraph (A), (B), or (C) of subsection (b)(2) under which the real property exchanged therefor originally qualified under subsection (a)." (2) CONFORMING AMENDMENTS.—

(A) Paragraph (1) of section 2032A(f) (relating to statute of 26 USC 2032A. limitations) is amended— (i) by inserting "or exchange" after "conversion", (ii) by inserting "or (i)" after 'W', and (iii) by inserting "or of the exchange of property" after "replace". (B) Paragraph (2) of section 6324B(c) (relating to special 26 USC 6324B. liens) is amended by inserting "and qualified exchange property (within the meaning of section 2032A(i)(3))" before Ante, p. 308. the period at the end thereof. (e) ELECTION REQUIREMENT OF SPECIAL RULES FOR INVOLUNTARY CONVERSIONS REPEALED.—

(1) IN GENERAL.—Section 2032A(h) (relating to special rules for 26 USC 2032A. involuntary conversions of qualified real property) is amended— (A) by striking out "and the qualified heir makes an election under this subsection" in paragraph (1)(A); and (B) by striking out paragraph (5). (2)

CONFORMING AMENDMENT.—Paragraph

(1)

of

section

2032A(f) is amended by striking out "to which an election under subsection (h)" and inserting in lieu thereof "to which subsection (h)". (f) METHOD OF VALUING FARMS.—

(1) Paragraph (7) of section 2032A(e) (relating to method of valuing farms) is amended by redesignating subparagraph (B) as subparagraph (C) and by inserting after subparagraph (A) the following new subparagraph: "(B) VALUE BASED ON NET SHARE RENTAL IN CERTAIN CASES.—

"(i) IN GENERAL.—If there is no comparable land from which the average annual gross cash rental may be determined but there is comparable land from which the average net share rental may be determined, subparagraph (A)(i) shall be applied by substituting 'average annual net share rental' for 'average annual gross cash rental'. "(ii) N E T 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."

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