PUBLIC LAW 97-34—AUG. 13, 1981
95 STAT. 311
section 2001 with respect to the estate of the decedent (as determined for purposes of section 6601)." (h) SPECIAL RULES FOR WOODLANDS.— (1) VALUE OF TIMBER INCLUDED IN VALUATION; ACTIVE MANAGE-
MENT TREATED AS MATERIAL PARTICIPATION.—SubsectiOD (e) of section 2032A is amended by adding at the end thereof the Ante, p. 308. following new paragraph: "(13) SPECIAL RULES FOR WOODLANDS.—
"(A) IN GENERAL.—In the case of any qualified woodland with respect to which the executor elects to have this subparagraph apply, trees growing on such woodland shall not be treated as a crop. "(B) QUALIFIED WOODLAND.—The term 'qualified woodland' means any real property which— "(i) is used in timber operations, and "(ii) is an identifiable area of land such as an acre or other area for which records are normally maintained in conducting timber operations. "(C) TIMBER OPERATIONS.—The term 'timber operations' means— "(i) the planting, cultivating, caring for, or cutting of trees, or "(ii) the preparation (other than milling) of trees for market. "(D) ELECTION.—An election under subparagraph (A) shall be made on the return of the tax imposed by section 2001. Such election shall be made in such manner as the Secretary shall by regulations prescribe. Such an election, once made, shall be irrevocable.' (2) RECAPTURE UPON DISPOSITION OF TIMBER.—Paragraph (2) of
section 2032A(c) (relating to amount of additional tax) is 26 USC 2032A. amended by adding at the end thereof the following new subparagraph: "(E) SPECIAL RULE FOR DISPOSITION OF TIMBER.—In the case of qualified woodland to which an election under subsection (e)(13)(A) applies, if the qualified heir disposes of (or severs) Supra. any standing timber on such qualified woodland— "(i) such disposition (or severance) shall be treated as a disposition of a portion of the interest of the qualified heir in such property, and "(ii) the amount of the additional tax imposed by paragraph (1) with respect to such disposition shall be an amount equal to the lesser of— "(I) the amount realized on such disposition (or, in any case other than a sale or exchange at arm's length, the fair market value of the portion of the interest disposed or severed), or "(II) the amount of additional tax determined under this paragraph (without regard to this subparagraph) if the entire interest of the qualified heir in the qualified woodland had been disposed of, less the sum of the amount of the additional tax imposed with respect to all prior transactions involving such woodland to which this subparagraph applied. For purposes of the preceding sentence, the disposition of a right to sever shall be treated as the disposition of the standing timber. The amount of additional tax imposed
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