S 2728 ISCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to provide that the value of certain historic property shall be determined using an income approach in determining the taxable estate of a decedent.CommentsClose CommentsPermalink

November 4, 2009CommentsClose CommentsPermalink

Mr. BURR (for himself, Mrs. HAGAN, and Mr. WICKER) introduced the following bill; which was read twice and referred to the Committee on FinanceCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to provide that the value of certain historic property shall be determined using an income approach in determining the taxable estate of a decedent.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. ESTATE TAX VALUATION OF CERTAIN HISTORIC PROPERTY.

(a) In General- Part III of subchapter A of chapter 11 of the Internal Revenue Code of 1986 (relating to gross estate) is amended by inserting after section 2032A the following new section:CommentsClose CommentsPermalink

‘SEC. 2032B. VALUATION OF CERTAIN HISTORIC PROPERTY.

‘(a) Value Based on Net Earnings of Historic Property- If--CommentsClose CommentsPermalink





‘(1) the decedent was (at the time of his death) a citizen or resident of the United States, andCommentsClose CommentsPermalink





‘(2) the executor executes an agreement which meets the requirements of subsection (c),CommentsClose CommentsPermalink





then, for the purposes of this chapter, the value of qualified historic property shall be based on the net earnings (as defined in subsection (b)(3)) derived from such property.CommentsClose CommentsPermalink





‘(b) Definitions and Special Rules- For purposes of this section--CommentsClose CommentsPermalink





‘(1) QUALIFIED HISTORIC PROPERTY- The term ‘qualified historic property’ means--CommentsClose CommentsPermalink





‘(A) any building (and its structural components)--CommentsClose CommentsPermalink





‘(i) which is designated as a National Historic Landmark under section 101 of the National Historic Preservation Act at the time of the decedent’s death and for a continuous period of at least 25 years prior to the decedent’s death, andCommentsClose CommentsPermalink





‘(ii) which was originally used for residential or farming purposes,CommentsClose CommentsPermalink





‘(B) any other real property to the extent reasonably necessary for ingress, egress, public enjoyment, and visitation of the property described in subparagraph (A) (but not including any real property used primarily for the sale, production, or manufacturing of products or for lodging purposes), andCommentsClose CommentsPermalink





‘(C) personal property included within, or associated with, property described in subparagraph (A) or (B) if such personal property--CommentsClose CommentsPermalink





‘(i) is held by the decedent holding such building,CommentsClose CommentsPermalink





‘(ii) has been so included within, or associated with, such property so described throughout the 25-year period ending on the date of the decedent’s death, andCommentsClose CommentsPermalink





‘(iii) is covered by the agreement referred to in subsection (a)(2) which covers such building,CommentsClose CommentsPermalink





owned by the decedent throughout the 25-year period ending on the date of the decedent’s death.CommentsClose CommentsPermalink





‘(2) TREATMENT OF HISTORIC PROPERTY HELD BY A CORPORATION- In the case of a corporation all of the stock in which was held on the date of the decedent’s death by the decedent or members of the decedent’s family (as defined in section 2032A(e)(2))--CommentsClose CommentsPermalink





‘(A) stock in such corporation shall be treated for purposes of this section as qualified historic property to the extent that the value of such stock is attributable to qualified historic property held by such corporation, butCommentsClose CommentsPermalink





‘(B) the requirements of subsection (c) shall be met only if each member of the decedent’s family holding such stock on such date signs the agreement referred to in subsection (a)(2).CommentsClose CommentsPermalink





‘(3) NET EARNINGS- The term ‘net earnings’ means income derived from qualified historic property (determined without regard to any interest, depreciation, or tax expense) times 7.CommentsClose CommentsPermalink





‘(4) DETERMINATION OF TIME PERIODS- In determining the period for which the decedent has held any property or stock, there shall be included the period for which such property or stock was held by members of the decedent’s family (as defined in section 2032A(e)(2)).CommentsClose CommentsPermalink





‘(c) Requirements for Agreement-CommentsClose CommentsPermalink





‘(1) IN GENERAL- For purposes of subsection (a)(2), an agreement meets the requirements of this subsection if--CommentsClose CommentsPermalink





‘(A) such agreement is a written agreement signed by each person in being who has an interest (whether or not in possession) in the building described in subsection (b)(1)(A),CommentsClose CommentsPermalink





‘(B) such agreement provides that the only activities carried on at such building are activities which are substantially related (aside from the need for income or funds or the use made of the profits derived) to--CommentsClose CommentsPermalink





‘(i) the public visitation of such building and the property described in subsection (b)(1)(B) with respect to such property), andCommentsClose CommentsPermalink





‘(ii) the maintenance and preservation of such building and property for such public visitation, andCommentsClose CommentsPermalink





‘(C) such agreement provides that such building will be open to the public for a period of at least 25 years beginning on the date on which the return of the tax imposed by this chapter is filed.CommentsClose CommentsPermalink





‘(2) OPEN TO THE PUBLIC- For the purposes of paragraph (1)(C)--CommentsClose CommentsPermalink





‘(A) a property shall be treated as being open to the public for any year if--CommentsClose CommentsPermalink





‘(i) a substantial portion of the property is open for public visitation for at least 8 hours per day and 6 days per week during at least any 40 weeks of such year,CommentsClose CommentsPermalink





‘(ii) the executor notifies the State historic agency that the property is open and available for public visitation,CommentsClose CommentsPermalink





‘(iii) public access to the property is achievable without undue and deliberate difficulty or cost purposely intended to discourage the visitation of the property,CommentsClose CommentsPermalink





‘(iv) 1 or more of the signatories to the agreement or professional or trained volunteer staff representing such signatories are available to facilitate the visitation of the property through at least 2 methods and practices common to the tourism industry, including telephone, website, mailing address, or ticket booth, andCommentsClose CommentsPermalink





‘(v) there is an ongoing effort to ensure the general public is aware that the property is available for visitation, andCommentsClose CommentsPermalink





‘(B) the 25-year period referred to in such paragraph shall be suspended during reasonable periods of renovation.CommentsClose CommentsPermalink





Communication under subparagraph (A)(v) shall not necessarily require expenditure of monies for advertising, but should include periodic contact with groups such as State and local historic agencies and tourism boards.CommentsClose CommentsPermalink





‘(d) Tax Treatment of Dispositions and Failure To Comply With Agreement-CommentsClose CommentsPermalink





‘(1) IMPOSITION OF ADDITIONAL ESTATE TAX- If, during the 25-year period referred to in subsection (c)(1)(C)--CommentsClose CommentsPermalink





‘(A) any person signing the written agreement referred to in subsection (a)(2) disposes of any interest in the building subject to such agreement, orCommentsClose CommentsPermalink





‘(B) there is a violation of any provision of such agreement (as determined under regulations prescribed by the Secretary),CommentsClose CommentsPermalink





then there is hereby imposed an additional estate tax.CommentsClose CommentsPermalink





‘(2) EXCEPTION FOR CERTAIN TRANSFEREES WHO AGREE TO BE BOUND BY AGREEMENT- No tax shall be imposed under paragraph (1) by reason of any disposition if the person acquiring such interest--CommentsClose CommentsPermalink





‘(A) is a qualified organization (as defined in section 170 (b)(1)(A)) or is a member of the family (as defined in section 2032A(e)(2)) of the person disposing of such interest, andCommentsClose CommentsPermalink





‘(B) agrees to be bound by the agreement referred to in subsection (a)(2) and to be liable for any tax under this subsection in the same manner as the person disposing of such interest.CommentsClose CommentsPermalink





‘(3) AMOUNT OF ADDITIONAL TAX- The amount of the additional tax imposed by paragraph (1) with respect to any property shall be an amount equal to the excess of--CommentsClose CommentsPermalink





‘(A) what would (but for subsection (a)) have been the tax imposed by section 2001 (reduced by the credits allowable), overCommentsClose CommentsPermalink





‘(B) the tax imposed by section 2001 (as so reduced).CommentsClose CommentsPermalink





‘(4) DUE DATE- The additional tax imposed by this subsection shall be due and payable on the day which is 9 months after the date of the disposition or violation referred to in paragraph (1).CommentsClose CommentsPermalink





‘(5) LIABILITY FOR TAX- Any person signing the agreement referred to in subsection (a)(2) (other than the executor) shall be personally liable for the additional tax imposed by this subsection. If more than 1 person is liable under this subsection, all such persons shall be jointly and severally liable.CommentsClose CommentsPermalink





‘(6) CERTAIN OTHER RULES TO APPLY- Rules similar to the rules of sections 1016(c), 2013(f), and 2032A(f) shall apply for purposes of this subsection.’.CommentsClose CommentsPermalink





(b) Coordination With Gift Tax- Section 2512 of the Internal Revenue Code of 1986 (relating to valuation of gifts) is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(c) For the purposes of this chapter, the value of qualified historic property (as defined in section 2032B(b)(1)) transferred for less than an adequate and full consideration shall be valued under section 2032B.’.CommentsClose CommentsPermalink





(c) Technical Amendments-CommentsClose CommentsPermalink





(1) Subparagraph (A) of section 2056A(b)(10) of the Internal Revenue Code of 1986 is amended by inserting ‘2032B,’ after ‘2032A,’.CommentsClose CommentsPermalink





(2) The table of sections for part III of subchapter A of chapter 11 of such Code is amended by inserting after the item relating to section 2032A the following new item:CommentsClose CommentsPermalink





‘Sec. 2032B. Valuation of certain historic property.’.CommentsClose CommentsPermalink





(d) Effective Date- The amendments made by this section shall apply with respect to the estates of decedents dying after the date of the enactment of this Act. Notwithstanding the preceding sentence, for the purposes of section 901 of the Economic Growth and Tax Reconciliation Act of 2001, the amendments made by this section shall be treated as being enacted before the date of the enactment of such Act.CommentsClose CommentsPermalink