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COMMONWEALTH OF PENNSYLVANIA

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Pennsylvania Code



Subchapter K. FAMILY FARM CORPORATION AND
FAMILY FARM PARTNERSHIP


Sec.


91.211.    Family farm corporation.
91.212.    Acquired family farm corporation.
91.213.    Declaration of acquisition.
91.221.    Family farm partnership.
91.222.    Acquired family farm partnership.
91.223.    Declaration of acquisition.

§ 91.211. Family farm corporation.

 (a)  A corporation shall meet the following requirements to constitute a family farm corporation:

   (1)  In the aggregate, the book value of the corporation’s assets that are primarily devoted to the business of agriculture continuously comprise at least 75% of the book value of all of the corporation’s assets.

   (2)  At least 75% of each class of stock of the corporation is owned by individuals who are members of the same family.

 (b)  To qualify as an asset devoted to the business of agriculture for the purpose of subsection (a), the assets must be:

   (1)  Owned and either used directly by the corporation claiming the exemption or leased to, and used directly by, a member of the same family that owns at least 75% of each class of stock of the corporation claiming the exemption.

   (2)  Principally devoted by the corporation to the business of agriculture or used by the member for agricultural purposes.

   (3)  Property of the sort commonly used in the business of agriculture principally for agricultural purposes.

   (4)  Used by the member principally for agricultural purposes or set apart and directly used by the corporation primarily for commercial:

     (i)   Cultivation of the earth to produce food products suitable for human or animal consumption, seeds, tobacco, turf or sod.

     (ii)   Rearing, feeding, breeding and management of livestock.

     (iii)   Raising and harvesting of orchards and vineyards.

     (iv)   Beekeeping.

     (v)   Rearing, feeding, breeding and management of fish or other aquatic animals for use as a food or food product.

 (c)  For the purposes of subsection (a), an asset does not qualify as an asset devoted to the business of agriculture if it is set apart and directly and principally used in:

   (1)  Recreational activities such as hunting, fishing, camping, skiing, boating, show competition or racing.

   (2)  Raising, breeding or training game animals or birds, fish, cats, dogs or an animal intended to be used in sporting events or for recreational activities.

   (3)  Fur farming.

   (4)  Stockyard and slaughterhouse operations.

   (5)  Manufacturing or processing operations.

   (6)  The business of holding property for rental income.

 (d)  For the purposes of subsection (a), §  91.201(b) (relating to real estate company) applies.

 (e)  For the purposes of this section, the business of agriculture includes a leasing of property to a member of the family having the ownership of at least 75% of each class of its stock if the property is used by the member directly and principally for an agricultural purpose.

Authority

   The provisions of this §  91.211 issued under section 1107-C of the Tax Reform Code of 1971 (72 P. S. §  8107-C).

Source

   The provisions of this §  91.211 adopted September 9, 1988, effective September 10, 1988, 18 Pa.B. 4096; amended December 14, 2007, effective December 15, 2007, 37 Pa.B. 6516. Immediately preceding text appears at serial pages (233385) to (233386).

Cross References

   This section cited in 61 Pa. Code §  91.221 (relating to family farm partnership).

§ 91.212. Acquired family farm corporation.

 A family farm corporation holding family farm realty becomes an acquired family farm corporation when:

   (1)  Because of the acquisition or transfer of a corporate asset, less than 75% of its total assets are devoted to the business of agriculture.

   (2)  Because of the issuance, cancellation or transfer of corporate stock, less than 75% of a class of stock of the corporation is owned by individuals who are members of the same family.

   (3)  The corporation is dissolved.

Authority

   The provisions of this §  91.212 issued under section 1107-C of the Tax Reform Code of 1971 (72 P. S. §  8107-C).

Source

   The provisions of this §  91.212 adopted September 9, 1988, effective September 10, 1988, 18 Pa.B. 4096.

Cross References

   This section cited in 61 Pa. Code §  91.113 (relating to imposition of tax on declarations of acquisition).

§ 91.213. Declaration of acquisition.

 A declaration of acquisition shall be filed in accordance with §  91.203 (relating to declaration of acquisition) with respect to family farm realty held on the date the family farm corporation became acquired.

Authority

   The provisions of this §  91.213 issued under section 1107-C of the Tax Reform Code of 1971 (72 P. S. §  8107-C).

Source

   The provisions of this §  91.213 adopted September 9, 1988, effective September 10, 1988, 18 Pa.B. 4096.

§ 91.221. Family farm partnership.

 (a)  An entity constitutes a family farm partnership only for so long as the following requirements are satisfied:

   (1)  In the aggregate, the book value of the partnership’s assets that are primarily devoted to the business of agriculture continuously comprise at least 75% of the book value of all of the partnership’s assets.

   (2)  At least 75% of the shares of the profits and surplus of the partnership are continuously owned by members of the same family.

   (3)  The entity is a general or common law partnership.

 (b)  Whether an asset is devoted to the business of agriculture shall be determined using the same rules as apply to the assets of family farm corporations. See §  91.211(b) (relating to family farm corporation).

Authority

   The provisions of this §  91.221 issued under section 1107-C of the Tax Reform Code of 1971 (72 P. S. §  8107-C).

Source

   The provisions of this §  91.221 adopted December 14, 2007, effective December 15, 2007, 37 Pa.B. 6516.

§ 91.222. Acquired family farm partnership.

 (Editor’s Note: Under section 29 of the act of July 2, 2012 (P.L. 751, No. 85), §  91.222 is abrogated.)

 A family farm partnership becomes an acquired family farm when one of the following occurs:

   (1)  Because of the acquisition or disposition of a partnership asset (including a transfer to a family member), the book value of the partnership’s assets that are primarily devoted to the business of agriculture becomes less than 75% of the book value of all of the partnership’s assets.

   (2)  Because of the assignment of an interest in profits or surplus or the death, retirement, bankruptcy, expulsion or addition of a partner, less than 75% of the shares of the profits and surplus of the entity is continuously owned by members of the same family.

   (3)  The partnership voluntarily or involuntarily dissolves or otherwise ceases to operate in the form of a general partnership or common law partnership.

Authority

   The provisions of this §  91.222 issued under section 1107-C of the Tax Reform Code of 1971 (72 P. S. §  8107-C).

Source

   The provisions of this §  91.222 adopted December 14, 2007, effective December 15, 2007, 37 Pa.B. 6516.

§ 91.223. Declaration of acquisition.

 A declaration of acquisition shall be filed in accordance with §  91.203 (relating to declaration of acquisition) with respect to family farm real estate held on the date the family farm partnership became acquired.

Authority

   The provisions of this §  91.223 issued under section 1107-C of the Tax Reform Code of 1971 (72 P. S. §  8107-C).

Source

   The provisions of this §  91.223 adopted December 14, 2007, effective December 15, 2007, 37 Pa.B. 6516.

Cross References

   This section cited in 61 Pa. Code §  91.113 (relating to imposition of tax on declarations of acquisitions).



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