![]() The recapture tax return must be filed electronically through e-Services, and the tax must be paid to the Minnesota Department of Revenue within six months after the date of disqualifying disposition or cessation of use. For the qualified farm property deduction, a family member does not maintain the 2a classification for the qualified property.Other produces include organic, free trade goats milk soap, carmels, jams and more. We will be selling fresh, organic produce. For the qualified small business property deduction, a family member is not involved in the operations of the trade or business on a standard, continual, and significant basis. We have a small hobby farm in Prior Lake, MN with goats, chickens and ducks.The qualified heir disposes of any interest in the qualified property except by disposition to a family member.The tax is applied if any of the following occurs within three years of the decedent’s death and before the death of the qualified heir: Qualified heirs must pay a recapture tax if they or a family member do not meet the ownership, participation, or maintenance requirements of the deduction(s) for the three years after the decedent’s death. The estate and qualified heir agree to pay the recapture tax, if applicable.Ī recapture tax is 16% of the total value (as allowed for federal estate tax purposes) of qualified property ceasing to satisfy the three-year holding period requirements.(See Internal Revenue Code, section 469(h).) A family member "materially participated" in the operations of the trade or business for three years set by the IRS.The decedent or the decedent's spouse continuously owned the property for a three-year period ending at the decedent's death.Cash, cash equivalents, publicly traded securities, or assets not used in the operation of the trade or business cannot be claimed as part of the deduction.The trade or business had gross annual sales of $10 million or less during the last taxable year that ended before the decedent's death.The decedent or decedent's spouse must meet certain material participation criteria set by the Internal Revenue Service (IRS). In general, to materially participate means being involved in the operations of the trade or business on a regular, continuous and substantial basis. The decedent or decedent's spouse "materially participated" in the operations of the trade or business during the taxable year that ended before the decedent's death.The property consists of trade or business property (or shares of stock or other ownership interests that are not publicly traded).The value of the property after deductions-including debts, expenses, and bequests to a surviving spouse-was included in the decedent's federal adjusted taxable estate.Qualified small business properties must meet all of the following requirements: Log in to Referring Agencies e-Services.
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