1400.206 Estates.§ 1400.206 Estates.
(a) For 2 program years after the program year in which a person dies, the person's estate will be considered to be actively engaged in farming if:
(1) The estate, as a legal entity, makes a significant contribution of either:
(i) Capital, equipment, or land or
(ii) A combination of capital, equipment, or land; and
(2) The personal representative or heirs of the estate collectively make a significant contribution of either:
(i) Active personal labor or active personal management or
(ii) The combination of active personal labor and active personal management; and
(3) The estate has a share of the profits or losses from the farming operation commensurate with the legal entity's contributions to the operation;
(4) The estate makes contributions to the farming operation that are at risk for a loss, with the level of risk being commensurate with the legal entity's claimed share of the farming operation; and
(5) The representative of the estate has provided a tax identification number for the estate and a copy of a court order, will, or other legal document that identifies the heir(s) and tax identification number(s) of the heir(s).
(b) For a farming operation conducted by an estate in which the capital, land, or equipment is contributed by the estate, such capital, land, or equipment:
(1) To meet the requirements of paragraph (a) of this section, must be contributed directly by the estate and must not be acquired as a loan made to, guaranteed, co-signed, or secured by:
(i) Any person, legal entity, or joint operation that has an interest in such farming operation, including the estate's heirs;
(ii) Such joint operation by any person, legal entity, or other joint operation that has an interest in such farming operation; or
(iii) Any person, legal entity, or joint operation in whose farming operation such an estate has an interest; and
(2) To meet the requirements of paragraphs (c)(3)and (a)(4) of this section, and if land, capital or equipment is acquired as a result of a loan made to, guaranteed, co-signed, or secured by the persons, legal entities, or joint operations as defined, the loan must:
(i) Bear the prevailing interest rate; and
(ii) Have a repayment schedule considered reasonable and customary for the area.
(c) After the period set forth in paragraph (a) of this section, the deceased person's estate will not be considered to be actively engaged in farming unless, on a case by case basis, the Deputy Administrator determines, for the purpose of obtaining program payments, that the estate has not been settled.[73 FR 79273, Dec. 29, 2008, as amended at 75 FR 900, Jan. 7, 2010]