Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2018

Property Tax Annotations

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Annotation 535.0026

535.0026 Income and Estate Tax Elections. The federal family business tax election under Internal Revenue Code section 2032 provides that a real property is appraised at its lesser "value in use" rather than its fair market value for estate tax purposes. In exchange for the lesser-appraised value, the use of the property is restricted to farming or other agricultural uses. However, a section 2032A election does not place a legal restriction on the use of real property, but rather merely places conditions on the heir's use of the property that do not run with the land. Thus, such elections are not enforceable government restrictions within the meaning of Revenue and Taxation Code section 402.1. C 10/24/2003.