Page:United States Statutes at Large Volume 95.djvu/339

 PUBLIC LAW 97-34—AUG. 13, 1981

95 STAT. 313

the item relating to section 1040 and inserting in lieu thereof the following: "Sec. 1040. Transfer of certain farm, etc., real property." (3) ELECTION MAY BE MADE ON LATE RETURNS.—Paragraph (1) of

section 2032A(d) (relating to election) is amended to read as 26 USC 2032A. follows: "(1) ELECTION.—The election under this section shall be made on the return of the tax imposed by section 2001. Such election shall be made in such manner as the Secretary shall by regulations prescribe. Such an election, once made, shall be irrevocable." (4) TREATMENT OF REPLACEMENT PROPERTY.—Subsection (e) of

section 2032A is amended by adding at the end thereof the Ante, p. 311. following new paragraph: "(14) TREATMENT OF REPLACEMENT PROPERTY ACQUIRED IN SECTION 1031 OR 1033 TRANSACTIONS.—

"(A) IN GENERAL.—In the case of any qualified replacement property, any period during which there was ownership, qualified use, or material participation with respect to the replaced property by the decedent or any member of his family shall be treated as a period during which there was such ownership, use, or material participation (as the case may be) with respect to the qualified replacement property. "(B) LIMITATION.—Subparagraph (A) shall not apply to the extent that the fair market value of the qualified replacement property (as of the date of its acquisition) exceeds the fair market value of the replaced property (as of the date of its disposition). "(C) DEFINITIONS.—For purposes of this paragraph— "(i) QUALIFIED REPLACEMENT PROPERTY.—The term

'qualified replacement property' means any real property which is— "(I) acquired in an exchange which qualifies under section 1031, or "(II) the acquisition of which results in the nonrecognition of gain under section 1033. Such term shall only include property which is used for the same qualified use as the replaced property was being used before the exchange. "(ii) REPLACED PROPERTY.—The term 'replaced property' means— "(I) the property transferred in the exchange which qualifies under section 1031, or "(II) the property compulsorily or involuntarily converted (within the meaning of section 1033). (k) EFFECTIVE DATES.—

(1) IN GENERAL.—Except as otherwise provided in this subsection, the amendments made by this section shall apply with respect to the estates of decedents dying after December 31, 1981. (2) INCREASE IN LIMITATION.—The amendment made by subsection (a) shall apply with respect to the estates of decedents dying after December 31, 1980. (3) SUBSECTION (d).—The amendments made by subsection (d) shall apply with respect to exchanges after December 31, 1981. (4) SUBSECTION (e).—The amendments made by subsection (e) shall apply with respect to involuntary conversions after December 31,198L

26 USC 2032A note.

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