Kansas Administrative Regulations

Regulation Number:92-2-67
Agency Title: KANSAS DEPARTMENT OF REVENUE
Article Title: Inheritance Taxes
Tax Type:Inheritance Tax
Brief Description:Special valuation of certain farm and closely held business
properties.
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Body:

92-2-67 Special valuation of certain farm and closely held business properties. (a) An election under K.S.A. 79-1545, and its amendments, shall be made on a timely filed form IH 80, Kansas inheritance tax return for estates filing federal estate tax returns, and by attaching to it a notice of election and an agreement to special valuation by persons with an interest in the property. The notice of election and agreement to special valuation shall be made in accordance with the form and informational content requirements set forth in Treasury Reg. Sec. 20.2032A-8 (1980), which is hereby adopted by reference. The special use valuation method provided by K.S.A. 79-1545, and its amendments, may be elected only when the special use valuation method is elected for federal estate tax purposes pursuant to 26 U.S.C. Sec. 2032A. The election shall be irrevocable once it is made. If a federal estate tax return is not filed, or if a federal estate tax return is filed but the special use valuation method is not elected, the Kansas special use valuation method shall not be used. The special valuation method provided by K.S.A. 79-1545, and its amendments, may not be elected if a qualified real property exclusion election has been made with respect to the estate under K.S.A. 79-1545b, and its amendments.
(b) A protective election to specially value qualified real property may be made only when a protective election to specially value qualified real property is made for federal estate tax purposes. A protective election may be made on a timely filed form IH 80, and by attaching to it a copy of the protective election to specially value qualified real property made for federal estate tax purposes.
(c) Requirements of material participation for valuation of certain farm and closely held business real property shall be determined in accordance with the general principles set forth in Treasury Reg. Sec. 20.2032A-3 (1980), which is hereby adopted by reference.
(d) The method of valuing farm real property shall be determined in accordance with the general principles set forth in Treasury Reg. Sec. 20.2032A-4 (1980), which is hereby adopted by reference.
(e) Within 90 days of the receipt of: (1) any line adjustment by the internal revenue service, or (2) a federal closing letter, the representative of the estate shall submit to the director of taxation a true copy of the line adjustments and computation of tax as adjusted, or the closing letter. Failure to comply shall result in the accrual of interest on the amount of any underpayment of tax. (Authorized by K.S.A. 79-1583; implementing K.S.A. 79-
1545, as amended by L. 1985, Ch. 316, Sec. 1; effective May 1, 1986.)