PUBLIC LAW 105-34—AUG. 5, 1997 111 STAT. 851 "(B) APPLICABLE PERCENTAGE.— For purposes of this paragraph, the apphcable percentage shall be determined under the following table: "If the event described in paragraph (1) occurs in the following year of The applicable material participation: percentage is: 1 through 6 100 7 80 8 60 9 40 10 20. "(g) SECURITY REQUIREMENTS FOR NONCITIZEN QUALIFIED HEIRS.— "(1) IN GENERAL.— Except upon the application of subparagraph (F) or (M) of subsection (i)(3), if a qualified heir is not a citizen of the United States, any interest under this section passing to or acquired by such heir (including any interest held by such heir at a time described in subsection (f)(1)(C)) shall be treated as a qualified family-owned business interest only if the interest passes or is acquired (or is held) in a qualified trust. "(2) QUALIFIED TRUST.— The term 'qualified trust' means a trust— "(A) which is organized under, and governed by, the laws of the United States or a State, and "(B) except as otherwise provided in regulations, with respect to which the trust instrument requires that at least 1 trustee of the trust be an individual citizen of the United States or a domestic corporation. "(h) AGREEMENT.— The agreement referred to in this subsection is a written agreement signed by each person in being who has an interest (whether or not in possession) in any property designated in such agreement consenting to the application of subsection (f) with respect to such property. "(i) OTHER DEFINITIONS AND APPLICABLE RULES.—For purposes of this section— "(1) QUALIFIED HEIR. —The term 'qualified heir'— "(A) has the meaning given to such term by section 2032A(e)(l), and "(B) includes any active employee of the trade or business to which the qualified family-owned business interest relates if such employee has been employed by such trade or business for a period of at least 10 years before the date of the decedent's death. "(2) MEMBER OF THE FAMILY.—The term 'member of the family' has the meaning given to such term by section 2032A(e)(2). "(3) APPLICABLE RULES.—Rules similar to the following rules shall apply: "(A) Section 2032A(b)(4) (relating to decedents who are retired or disabled). "(B) Section 2032A(b)(5) (relating to special rules for surviving spouses). "(C) Section 2032A(c)(2)(D) (relating to partial dispositions). "(D) Section 2032A(c)(3) (relating to only 1 additional tax imposed with respect to any 1 portion).
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