Minnesota Legislature
HF 2809
as introduced - 87th Legislature (2011 - 2012) Posted on 03/15/2012 11:46am
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A bill for an act
relating to taxation; estate; modifying requirements for qualified farm
and qualified small business property; amending Minnesota Statutes 2011
Supplement, section 291.03, subdivisions 9, 10.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2011 Supplement, section 291.03, subdivision 9, is
amended to read:
Subd. 9.
Qualified small business property.
Property satisfying all of the following
requirements is qualified small business property:
(1) The value of the property was included in the federal adjusted taxable estate.
(2) The property consists of the assets of a trade or business or shares of stock or
other ownership interests in a corporation or other entity engaged in a trade or business.
The decedent or the decedent's spouse must have materially participated in the trade or
business within the meaning of section 469 of the Internal Revenue Code during the
taxable year that ended before the date of the decedent's death. Shares of stock in a
corporation or an ownership interest in another type of entity do not qualify under this
subdivision if the shares or ownership interests are traded on a public stock exchange at
any time during the three-year period ending on the decedent's date of death.
(3) The gross annual sales of the trade or business were $10,000,000 or less for the
last taxable year that ended before the date of the death of the decedent.
(4) The property does not consist of cash or cash equivalents. For property consisting
of shares of stock or other ownership interests in an entity, the amount of cash or cash
equivalents held by the corporation or other entity must be deducted from the value of
the property qualifying under this subdivision in proportion to the decedent's share of
ownership of the entity on the date of death.
(5) The decedent deleted text begin continuouslydeleted text end owned the property deleted text begin for the three-year period endingdeleted text end
on deleted text begin the date of death ofdeleted text end the deleted text begin decedentdeleted text end new text begin decedent's date of deathnew text end .
(6) A family member continuously uses the property in the operation of the trade or
business for three years following the date of death of the decedent.
(7) The estate and the qualified heir elect to treat the property as qualified small
business property and agree, in the form prescribed by the commissioner, to pay the
recapture tax under subdivision 11, if applicable.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for estates of decedents dying after
June 30, 2012.
new text end
Sec. 2.
Minnesota Statutes 2011 Supplement, section 291.03, subdivision 10, is
amended to read:
Subd. 10.
Qualified farm property.
Property satisfying all of the following
requirements is qualified farm property:
(1) The value of the property was included in the federal adjusted taxable estate.
(2) The property consists of a farm meeting the requirements of section 500.24,
and was classified for property tax purposes as the homestead of the decedent or the
decedent's spouse or both under section 273.124, and as class 2a property under section
273.13, subdivision 23.
(3) The decedent deleted text begin continuouslydeleted text end owned the property deleted text begin for the three-year period endingdeleted text end
on deleted text begin the date of death ofdeleted text end the deleted text begin decedentdeleted text end new text begin decedent's date of deathnew text end .
(4) A family member continuously uses the property in the operation of the trade or
business for three years following the date of death of the decedent.
(5) The estate and the qualified heir elect to treat the property as qualified farm
property and agree, in a form prescribed by the commissioner, to pay the recapture tax
under subdivision 11, if applicable.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for estates of decedents dying after
June 30, 2012.
new text end