(e) Definitions; special rules
For purposes of this section—
(1) Qualified heir
The term “qualified heir” means, with respect to any property, a member of the decedent’s family who acquired such property (or to whom such property passed) from the decedent. If a qualified heir disposes of any interest in qualified real property to any member of his family, such member shall thereafter be treated as the qualified heir with respect to such interest.
(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.
(3) Certain real property included
In the case of real property which meets the requirements of subparagraph (C) of subsection (b)(1), residential buildings and related improvements on such real property occupied on a regular basis by the owner or lessee of such real property or by persons employed by such owner or lessee for the purpose of operating or maintaining such real property, and roads, buildings, and other structures and improvements functionally related to the qualified use shall be treated as real property devoted to the qualified use.
(4) Farm
The term “farm” includes stock, dairy, poultry, fruit, furbearing animal, and truck farms, plantations, ranches, nurseries, ranges, greenhouses or other similar structures used primarily for the raising of agricultural or horticultural commodities, and orchards and woodlands.
(5) Farming purposes
The term “farming purposes” means—
(A) cultivating the soil or raising or harvesting any agricultural or horticultural commodity (including the raising, shearing, feeding, caring for, training, and management of animals) on a farm;
(B) handling, drying, packing, grading, or storing on a farm any agricultural or horticultural commodity in its unmanufactured state, but only if the owner, tenant, or operator of the farm regularly produces more than one-half of the commodity so treated; and
(C)
(i) the planting, cultivating, caring for, or cutting of trees, or
(ii) the preparation (other than milling) of trees for market.
(6) Material participation
Material participation shall be determined in a manner similar to the manner used for purposes of paragraph (1) of section 1402(a) (relating to net earnings from self-employment).
(7) Method of valuing farms
(A) In general
Except as provided in subparagraph (B), the value of a farm for farming purposes shall be determined by dividing—
(i) the excess of the average annual gross cash rental for comparable land used for farming purposes and located in the locality of such farm over the average annual State and local real estate taxes for such comparable land, by
(ii) the average annual effective interest rate for all new Federal Land Bank loans.
For purposes of the preceding sentence, each average annual computation shall be made on the basis of the 5 most recent calendar years ending before the date of the decedent’s death.
(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) Net 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.
(C) Exception
The formula provided by subparagraph (A) shall not be used—
(i) where it is established that there is no comparable land from which the average annual gross cash rental may be determined, or
(ii) where the executor elects to have the value of the farm for farming purposes determined and that there is no comparable land from which the average net share rental may be determined under paragraph (8).
(8) Method of valuing closely held business interests, etc.
In any case to which paragraph (7)(A) does not apply, the following factors shall apply in determining the value of any qualified real property:
(A) The capitalization of income which the property can be expected to yield for farming or closely held business purposes over a reasonable period of time under prudent management using traditional cropping patterns for the area, taking into account soil capacity, terrain configuration, and similar factors,
(B) The capitalization of the fair rental value of the land for farm land or closely held business purposes,
(C) Assessed land values in a State which provides a differential or use value assessment law for farmland or closely held business,
(D) Comparable sales of other farm or closely held business land in the same geographical area far enough removed from a metropolitan or resort area so that nonagricultural use is not a significant factor in the sales price, and
(E) Any other factor which fairly values the farm or closely held business value of the property.
(9) Property acquired from decedent
Property shall be considered to have been acquired from or to have passed from the decedent if—
(A) such property is so considered under section 1014(b) (relating to basis of property acquired from a decedent),
(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).
(10) Community property
If the decedent and his surviving spouse at any time held qualified real property as community property, the interest of the surviving spouse in such property shall be taken into account under this section to the extent necessary to provide a result under this section with respect to such property which is consistent with the result which would have obtained under this section if such property had not been community property.
(11) Bond in lieu of personal liability
If the qualified heir makes written application to the Secretary for determination of the maximum amount of the additional tax which may be imposed by subsection (c) with respect to the qualified heir’s interest, the Secretary (as soon as possible, and in any event within 1 year after the making of such application) shall notify the heir of such maximum amount. The qualified heir, on furnishing a bond in such amount and for such period as may be required, shall be discharged from personal liability for any additional tax imposed by subsection (c) and shall be entitled to a receipt or writing showing such discharge.
(12) Active management
The term “active management” means the making of the management decisions of a business (other than the daily operating decisions).
(13) Special rules for woodlands
(A) In general
In the case of any qualified woodland with respect to which the executor elects to have this subparagraph apply, trees growing on such woodland shall not be treated as a crop.
(B) Qualified woodland
The term “qualified woodland” means any real property which—
(i) is used in timber operations, and
(ii) is an identifiable area of land such as an acre or other area for which records are normally maintained in conducting timber operations.
(C) Timber operations
The term “timber operations” means—
(i) the planting, cultivating, caring for, or cutting of trees, or
(ii) the preparation (other than milling) of trees for market.
(D) Election
An election under subparagraph (A) 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.
(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).
Inflation Adjusted Items for Certain Years
For inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under section 1 of this title.
References in Text
The Social Security Act, referred to in subsec. (b)(4)(A)(i), is act Aug. 14, 1935, ch. 531, 49 Stat. 620, as amended. Title II of the Social Security Act is classified generally to subchapter II (§ 401 et seq.) of chapter 7 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see section 1305 of Title 42 and Tables.
Amendments
2004—Subsec. (c)(7)(D). Pub. L. 108–311 substituted “section 152(f)(2)” for “section 151(c)(4)”.
1997—Subsec. (a)(3). Pub. L. 105–34, § 501(b), added par. (3).
Subsec. (b)(5)(A). Pub. L. 105–34, § 504(b), struck out at end “For purposes of subsection (c), such surviving spouse shall not be treated as failing to use such property in a qualified use solely because such spouse rents such property to a member of such spouse’s family on a net cash basis.”
Subsec. (c)(7)(E). Pub. L. 105–34, § 504(a), added subpar. (E).
Subsec. (c)(8). Pub. L. 105–34, § 508(c), added par. (8).
Subsec. (d)(3). Pub. L. 105–34, § 1313(a), amended heading and text of par. (3) generally. Prior to amendment, text read as follows: “The Secretary shall prescribe procedures which provide that in any case in which—
“(A) the executor makes an election under paragraph (1) within the time prescribed for filing such election, and
“(B) substantially complies with the regulations prescribed by the Secretary with respect to such election, but—
“(i) the notice of election, as filed, does not contain all required information, or
“(ii) signatures of 1 or more persons required to enter into the agreement described in paragraph (2) are not included on the agreement as filed, or the agreement does not contain all required information,
the executor will have a reasonable period of time (not exceeding 90 days) after notification of such failures to provide such information or agreements.”
1990—Subsec. (a)(2). Pub. L. 101–508 amended par. (2) generally, substituting present provisions for provisions which established graduated increase in applicable limit on aggregate reduction in fair market value from $600,000 in the case of decedents dying in 1981 to $750,000 in the case of decedents dying in 1983 or thereafter.
1988—Subsec. (b)(5)(A). Pub. L. 100–647 inserted at end “For purposes of subsection (c), such surviving spouse shall not be treated as failing to use such property in a qualified use solely because such spouse rents such property to a member of such spouse’s family on a net cash basis.”
1986—Subsec. (c)(7)(D). Pub. L. 99–514 substituted “section 151(c)(4)” for “section 151(e)(4)”.
1984—Subsec. (d)(3). Pub. L. 98–369 added par. (3).
1983—Subsec. (b)(5)(C). Pub. L. 97–448, § 104(b)(1), added subpar. (C).
Subsec. (i)(1)(B)(ii). Pub. L. 97–448, § 104(b)(2)(A), substituted “the qualified exchange property” for “the other property”.
Subsec. (i)(3). Pub. L. 97–448, § 104(b)(2)(B), substituted “subparagraph (A) or (B)” for “subparagraph (A), (B), or (C)”.
1981—Subsec. (a)(2). Pub. L. 97–34, § 421(a), substituted “Limit on aggregate reduction in fair market value” for “Limitation” in heading “shall not exceed the applicable limit set forth in the following table:” for “shall not exceed $500,000” in text, and inserted table.
Subsec. (b)(1). Pub. L. 97–34, § 421(b)(1), substituted “qualified use by the decedent or a member of the decedent’s family” for “qualified use” in provision preceding subpar. (A), and in subpars. (A)(i) and (C)(i).
Subsec. (b)(4), (5). Pub. L. 97–34, § 421(b)(2), added pars. (4) and (5).
Subsec. (c)(1). Pub. L. 97–34, § 421(c)(1)(A), substituted “10 years” for “15 years”.
Subsec. (c)(2)(E). Pub. L. 97–34, § 421(h)(2), added subpar. (E).
Subsec. (c)(3). Pub. L. 97–34, § 421(c)(1)(B)(i), redesignated par. (4) as (3) and struck out former par. (3), which provided for a phaseout of additional tax between the 10th and 15th years.
Subsec. (c)(4), (5). Pub. L. 97–34, § 421(c)(1)(B)(i), redesignated pars. (5) and (6) as (4) and (5), respectively. Former par. (4) redesignated (3).
Subsec. (c)(6). Pub. L. 97–34, § 421(c)(2)(B)(ii), in subpar. (B) substituted “more than 3 years” for “3 years or more”.
Pub. L. 97–34, § 421(c)(1)(B)(i), redesignated par. (7) as (6). Former par. (6) redesignated (5).
Subsec. (c)(7). Pub. L. 97–34, § 421(c)(1)(B)(i), (2)(A), added par. (7). Former par. (7) redesignated (6).
Subsec. (d)(1). Pub. L. 97–34, § 421(j)(3), substituted “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.” for “The election under this section shall be made not later than the time prescribed by section 6075(a) for filing the return of tax imposed by section 2001 (including extensions thereof), and shall be made in such manner as the Secretary shall by regulations prescribe.”
Subsec. (e)(2). Pub. L. 97–34, § 421(i), substituted provisions designated subpars. (A) through (D) for “such individual’s ancestor or lineal descendant, a lineal descendant of a grandparent of such individual, the spouse of such individual, or the spouse of any such descendant”.
Subsec. (e)(7). Pub. L. 97–34, § 421(f), added subpar. (B), redesignated former subpar. (B) as (C), and inserted “and that there is no comparable land from which the average net share rental may be determined” after “determined” in subpar. (C), without specifying whether the language was to be inserted in cl. (i) or (ii) of subpar. (C). In view of H. Rept. No. 97–201, 97th Cong., July 14, 1981, p. 492, the language was inserted in cl. (ii) as the probable intent of Congress.
Subsec. (e)(9). Pub. L. 97–34, § 421(j)(2)(A), struck out from subpar. (B) “in satisfaction of the right of such person to a pecuniary bequest” after “from the estate” and in subpar. (C) substituted “(to the extent such property is includible in the gross estate of the decedent)” for “in satisfaction of a right (which such person has by reason of the death of the decedent) to receive from the trust a specific dollar amount which is the equivalent of a pecuniary bequest”.
Subsec. (e)(12). Pub. L. 97–34, § 421(c)(2)(B)(i), added par. (12).
Subsec. (e)(13), (14). Pub. L. 97–34, § 421(h)(1), (j)(4), added pars. (13) and (14).
Subsec. (f)(1). Pub. L. 97–34, § 421(e)(2), substituted “to which subsection (h)” for “to which an election under subsection (h)”.
Pub. L. 97–34, § 421(d)(2)(A), substituted “conversion or exchange”, “(h) or (i)”, and “replace or of the exchange of property” for “conversion”, “(h)”, and “replace”.
Subsec. (g). Pub. L. 97–34, § 421(j)(1), inserted provision that 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.
Subsec. (h)(1)(A). Pub. L. 97–34, § 421(e)(1)(A), struck out “and the qualified heir makes an election under this subsection” after “qualified real property”.
Subsec. (h)(2)(A). Pub. L. 97–34, § 421(c)(1)(B)(ii), substituted “; except that” for “, except that” and “the 10-year period” for “the 15-year period”, deleted cl. (i) designation, and struck out cl. (ii), which provided the phaseout period under par. (3) of subsec. (c) be appropriately adjusted to take into account the extension referred to in cl. (i).
Subsec. (h)(2)(C). Pub. L. 97–34, § 421(c)(1)(B)(iii), substituted “(6)” for “(7)” in provisions preceding cl. (i).
Subsec. (h)(5). Pub. L. 97–34, § 421(e)(1)(B), struck out par. (5) which provided for making a subsec. (h) election at such time and in such manner as the Secretary may by regulations prescribe.
Subsec. (i). Pub. L. 97–34, § 421(d)(1), added subsec. (i).
1978—Subsec. (b)(1). Pub. L. 95–600, § 702(d)(1), inserted “which was acquired from or passed from the decedent to a qualified heir of the decedent and” after “located in the United States”.
Subsec. (c)(6). Pub. L. 95–600, § 702(d)(5)(A), inserted “unless the heir has furnished bond which meets the requirements of subsection (e)(11)” after “respect to his interest”.
Subsec. (e)(9). Pub. L. 95–600, § 702(d)(2), added par. (9).
Subsec. (e)(10). Pub. L. 95–600, § 702(d)(4), added par. (10).
Subsec. (e)(11). Pub. L. 95–600, § 702(d)(5)(B), added par. (11).
Subsec. (f)(1). Pub. L. 95–472, § 4(c), inserted provision relating to the expiration of the statutory period for the assessment of additional tax due under subsec. (c) in the case of an involuntary conversion to which an election under subsec. (h) is applicable.
Subsec. (h). Pub. L. 95–472, § 4(a), added subsec. (h).
Effective Date of 2004 Amendment
Amendment by Pub. L. 108–311 applicable to taxable years beginning after Dec. 31, 2004, see section 208 of Pub. L. 108–311, set out as a note under section 2 of this title.
Effective Date of 1997 Amendment
Amendment by section 501(b) of Pub. L. 105–34 applicable to estates of decedents dying, and gifts made, after Dec. 31, 1997, see section 501(f) of Pub. L. 105–34, set out as a note under section 2001 of this title.
Pub. L. 105–34, title V, § 504(c), Aug. 5, 1997, 111 Stat. 854, provided that:
“The amendments made by this section [amending this section] shall apply with respect to leases entered into after December 31, 1976.”
Amendment by section 508(c) of Pub. L. 105–34 applicable to easements granted after Dec. 31, 1997, see section 508(e)(2) of Pub. L. 105–34, set out as a note under section 170 of this title.
Pub. L. 105–34, title XIII, § 1313(b), Aug. 5, 1997, 111 Stat. 1045, provided that:
“The amendment made by subsection (a) [amending this section] shall apply to the estates of decedents dying after the date of the enactment of this Act [Aug. 5, 1997].”
Effective Date of 1988 Amendment
Pub. L. 100–647, title VI, § 6151(b), Nov. 10, 1988, 102 Stat. 3724, provided that:
“(1) In general.— The amendment made by subsection (a) [amending this section] shall apply with respect to rentals occurring after December 31, 1976.
“(2) Waiver of statute of limitations.— If on the date of the enactment of this Act [Nov. 10, 1988] (or at any time within 1 year after such date of enactment) refund or credit of any overpayment of tax resulting from the application of the amendment made by subsection (a) is barred by any law or rule of law, refund or credit of such overpayment shall, nevertheless, be made or allowed if claim therefore is filed before the date 1 year after the date of the enactment of this Act.”
Effective Date of 1986 Amendment
Amendment by Pub. L. 99–514 applicable to taxable years beginning after Dec. 31, 1986, see section 151(a) of Pub. L. 99–514, set out as a note under section 1 of this title.
Effective Date of 1984 Amendment
Pub. L. 98–369, div. A, title X, § 1025(b), July 18, 1984, 98 Stat. 1031, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
“(1) In general.— The amendment made by this section [amending this section] shall apply to estates of decedents dying after December 31, 1976.
“(2) Refund or credit of overpayment barred by statute of limitations.— Notwithstanding section 6511(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] or any other period of limitation or lapse of time, a claim for credit or refund of overpayment of the tax imposed by such Code which arises by reason of this section may be filed by any person at any time within the 1-year period beginning on the date of the enactment of this Act [July 18, 1984]. Sections 6511(b) and 6514 of such Code shall not apply to any claim for credit or refund filed under this subsection within such 1-year period.”
Effective Date of 1983 Amendment
Amendment by Pub. L. 97–448 effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981, Pub. L. 97–34, to which such amendment relates, see section 109 of Pub. L. 97–448, set out as a note under section 1 of this title.
Effective Date of 1981 Amendment
Pub. L. 97–34, title IV, § 421(k), Aug. 13, 1981, 95 Stat. 313, as amended by Pub. L. 97–448, title I, § 104(b)(4), Jan. 12, 1983, 96 Stat. 2382; Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
“(1) In general.— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 1016, 1040, and 6324B of this title] shall apply with respect to the estates of decedents dying after December 31, 1981.
“(2) Increase in limitation.— The amendment made by subsection (a) [amending this section] shall apply with respect to the estates of decedents dying after December 31, 1980.
“(3) Subsection (d).— The amendments made by subsection (d) [amending this section and section 6324B of this title] shall apply with respect to exchanges after December 31, 1981.
“(4) Subsection (e).— The amendments made by subsection (e) [amending this section] shall apply with respect to involuntary conversions after December 31, 1981.
“(5) Certain amendments made retroactive to 1976.—
“(A) In general.— The amendments made by subsections (b)(1), (j)(1), and (j)(2) [amending this section and
section 1040 of this title] and the provisions of subparagraph (A) of section 2032A(c)(7) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (c)(2)) shall apply with respect to the estates of decedents dying after December 31, 1976.
“(B) Timely election required.— Subparagraph (A) shall only apply in the case of an estate if a timely election under section 2032A was made with respect to such estate. If the estate of any decedent would not qualify under section 2032A of the Internal Revenue Code of 1986 but for the amendments described in subparagraph (A) and the time for making an election under section 2032A with respect to such estate would (but for this sentence) expire after July 28, 1980, the time for making such election shall not expire before the close of February 16, 1982.
“(C) Reinstatement of elections.— If any election under section 2032A was revoked before the date of the enactment of this Act [Aug. 13, 1981], such election may be reinstated at any time before February 17, 1982.
“(D) Statute of limitations.— If on the date of the enactment of this Act [Aug. 13, 1981] (or at any time before February 17, 1982) the making of a credit or refund of any overpayment of tax resulting from the amendments described in subparagraph (A) is barred by any law or rule of law, such credit or refund shall nevertheless be made if claim therefor is made before February 17, 1982.”
Effective Date of 1978 Amendment
Pub. L. 95–600, title VII, § 702(d)(6), Nov. 6, 1978, 92 Stat. 2929, provided that:
“The amendments made by this subsection [amending this section and
section 1040 of this title] shall apply to the estates of decedents dying after December 31, 1976.”
Amendment of section by Pub. L. 95–472 applicable with respect to involuntary conversions after Dec. 31, 1976, see section 4(d) of Pub. L. 95–472, set out as a note under section 1016 of this title.
Effective Date
Pub. L. 94–455, title XX, § 2003(e), Oct. 4, 1976, 90 Stat. 1862, provided that:
“The amendments made by this section [enacting this section and
section 6324B of this title and amending
section 2013 of this title] shall apply to the estates of decedents dying after December 31, 1976.”
Savings Provision
For provisions that nothing in amendment by Pub. L. 101–508 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Nov. 5, 1990, for purposes of determining liability for tax for periods ending after Nov. 5, 1990, see section 11821(b) of Pub. L. 101–508, set out as a note under section 45K of this title.
Waiver of Statute of Limitation for Taxes on Certain Farm Valuations
Pub. L. 107–16, title V, § 581, June 7, 2001, 115 Stat. 93, provided that:
“If on the date of the enactment of this Act [June 7, 2001] (or at any time within 1 year after the date of the enactment) a refund or credit of any overpayment of tax resulting from the application of section 2032A(c)(7)(E) of the Internal Revenue Code of 1986 is barred by any law or rule of law, the refund or credit of such overpayment shall, nevertheless, be made or allowed if claim therefor is filed before the date 1 year after the date of the enactment of this Act.”
Information Necessary for Valid Special Use Valuation Election
Pub. L. 99–514, title XIV, § 1421, Oct. 22, 1986, 100 Stat. 2716, as amended by Pub. L. 100–647, title I, § 1014(f), Nov. 10, 1988, 102 Stat. 3562, provided that:
“(a) In General.—
In the case of any decedent dying before January 1, 1986, if the executor—
“(1) made an election under section 2032A of the Internal Revenue Code of 1954 [now 1986] on the return of tax imposed by section 2001 of such Code, and
“(2) provided substantially all the information with respect to such election required on such return of tax,
such election shall be a valid election for purposes of section 2032A of such Code.
“(b) Executor Must Provide Information.— An election described in subsection (a) shall not be valid if the Secretary of the Treasury or his delegate after the date of the enactment of this Act [Oct. 22, 1986] requests information from the executor with respect to such election and the executor does not provide such information within 90 days of receipt of such request.
“(c) Effective Date.—
The provisions of this section shall not apply to the estate of any decedent if before the date of the enactment of this Act [Oct. 22, 1986] the statute of limitations has expired with respect to—
“(1) the return of tax imposed by section 2001 of the Internal Revenue Code of 1954 [now 1986], and
“(2) the period during which a claim for credit or refund may be timely filed.
“(d) Special Rule for Certain Estate.—
Notwithstanding subsection (a)(2), the provisions of this section shall apply to the estate of an individual who died on January 30, 1984, and with respect to which—
“(1) a Federal estate tax return was filed on October 30, 1984, electing current use valuation, and
“(2) the agreement required under section 2032A was filed on November 9, 1984.”
Land Diverted Under 1983 Payment-in-Kind Program
Land diverted from production of agricultural commodities under a 1983 payment-in-kind program to be treated, for purposes of this section, as used during the 1983 crop year by qualified taxpayers in the active conduct of the trade or business of farming, with qualified taxpayers who materially participate in the diversion and devotion to conservation uses under a 1983 payment-in-kind program to be treated as materially participating in the operation of such land during the 1983 crop year, see section 3 of Pub. L. 98–4, set out as a note under section 61 of this title.