Can real estate qualify for the family business deduction?

August 18, 2000

Date:  Thu 27 Jul 2000
From:  Anonymous

We own a lot of rental real estate and the IRS has a special deduction for family run businesses. My question is does real estate that is income producing that has been held for 50 years and in which the heir is active qualify for the family business deduction?


Date:  28 Jul 2000

I think your question relates to the new estate tax deduction relating to a family business.

Real estate that is passively rented does not qualify for the deduction. Real estate used for a family farm or in a trade or business, such as a motel, may qualify.

The tax rules relating to this deduction are very complex. If you want to plan for using the deduction, I recommend you work with a good estate planning attorney.

Good luck!
Mike Gray

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