Page:United States Statutes at Large Volume 95.djvu/338

 95 STAT. 312

PUBLIC LAW 97-34—AUG. 13, 1981 under paragraph (1) in any case in which a qualified heir disposes of his entire interest in the qualified woodland shall be reduced by any amount determined under this subparagraph with respect to such woodland." (i) DEFINITION OF FAMILY MEMBER.—Paragraph (2) of section

26 USC 2032A.

2032A(e) (defining member of family) is amended to read as follows: "(2) MEMBER OF FAMILY.—The term 'member of the family' means, with respect to any individual, only— "(A) an ancestor of such individual, "(B) the spouse of such individual, "(C) a lineal descendant of such individual, of such individual's spouse, or of a parent of such individual, or "(D) the spouse of any lineal descendant described in subparagraph (C). For purposes of the preceding sentence, a legally adopted child of an individual shall be treated as the child of such individual by blood." (j) MISCELLANEOUS AMENDMENTS.— (1) PROPERTY TRANSFERRED TO

CERTAIN

DISCRETIONARY

TRUSTS.—Subsection (g) of section 2032A (relating to application of section 2032A and section 6324B to interests in partnerships, corporations, and trusts) is amended by adding at the end thereof the following new sentence: "For purposes of the preceding sentence, an interest in a discretionary trust all the beneficiaries of which are qualified heirs shall be treated as a present interest." (2) PROPERTY PURCHASED FROM DECEDENT'S ESTATE ELIGIBLE FOR SPECIAL VALUATION.—

(A) IN GENERAL.—Paragraph (9) of section 2032A(e) is amended by striking out subparagraphs (B) and (C) and inserting in lieu thereof the following: "(B) such property is acquired by any person from the estate, or "(C) such property is acquired by any person from a trust (to the extent such property is includible in the gross estate of the decedent)." (B) NONRECOGNITION OF GAIN.—The section heading and subsections (a) and (b) of section 1040 are amended to read as follows:

94 Stat. 300.

"SEC. 1040. TRANSFER OF CERTAIN FARM, ETC., REAL PROPERTY.

26 USC 2001 et

"(a) GENERAL RULE.—If the executor of the estate of any decedent transfers to a qualified heir (within the meaning of section 2032A(e)(l)) any property with respect to which an election was made under section 2032A, then gain on such transfer shall be recognized to the estate only to the extent that, on the date of such exchange, the fair market value of such property exceeds the value of such property for purposes of chapter 11 (determined without regard to section

««9-

2032A).

"(b) SIMILAR RULE FOR CERTAIN TRUSTS.—To the extent provided in regulations prescribed by the Secretary, a rule similar to the rule provided in subsection (a) shall apply where the trustee of a trust (any portion of which is included in the gross estate of the decedent) transfers property with respect to which an election was made under section 2032A." (C) CLERICAL AMENDMENT.—The table of sections for part III of subchapter O of chapter 1 is amended by striking out

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