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The Taxpayer Relief Act of 1007 offers some estate tax belief for family-owned farms $hd businesses. Under the tSLJ law, estates could exclude |600,000 in assets from tax. ¥he new law gradually increases this exclusion to 1^,000,000 between 1998 and J006.
However, estates that jpclude family-owned business interests are not limited f«i this general exclusion; fftey may be able to exclude gp to $1,300,000 in assets. K>r estates that are able to take advantage of the Increased exclusion, the additional tax savings are available in 1998. There is no gradual phase-in as with the general exclusion.
The new law is effective jpjr estates of people who die jffter 1997. There are a number a requirements for the notate to qualify for the family-owned business exclusion. Jfcr example, the value of the family-owned business interests must exceed 50% of the bptal estate, and the decedent an his family must have materially participated in the f&siness for at least five of the eight years before his tteath. The business must be located in the United States, jnd it must be owned at least 80% by one family, 70% by Jfcro families, or 90% by three ttmilies. The estate must ness its ownership to “qualified heirs,” which can be Members of the decedent’s £unily or individuals who jere actively employed in the
liness for at least ten years
sfore the decedent’s death.
The qualified heirs or JSieir families are required to
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