PUBLIC LAW 105-34—AUG. 5, 1997 111 STAT. 857 (1) Subpart A of part I of subchapter J of chapter 1 is amended by striking section 644 and by redesignating section 645 as section 644. (2) Paragraph (5) of section 706(b) is amended by striking "section 645" and inserting "section 644". (3) The table of sections for such subpart is amended by striking the last 2 items and inserting the following new item: "Sec. 644. Taxable year of trusts.". (c) EFFECTIVE DATES.— (1) ACCUMULATION DISTRIBUTIONS.—The amendments 26 USC 665 note. made by subsection (a) shall apply to distributions in taxable years beginning after the date of the enactment of this Act. (2) TRANSFERRED PROPERTY.—The amendments made by 26 USC 644 note, subsection (b) shall apply to sales or exchanges after the date of the enactment of this Act. SEC. 508. TREATMENT OF LAND SUBJECT TO A QUALIFIED CONSERVA- TION EASEMENT. (a) ESTATE TAX WITH RESPECT TO LAND SUBJECT TO A QUALI- FIED CONSERVATION EASEMENT. —Section 2031 (relating to the definition of gross estate) is amended by redesignating subsection (c) as subsection (d) and by inserting after subsection (b) the following new subsection: "(c) ESTATE TAX WITH RESPECT TO LAND SUBJECT TO A QUALI- FIED CONSERVATION EASEMENT. — "(1) IN GENERAL.—I f the executor makes the election described in paragraph (6), then, except as otherwise provided in this subsection, there shall be excluded from the gross estate the lesser of— "(A) the applicable percentage of the value of land subject to a qualified conservation easement, reduced by the amount of any deduction under section 2055(f) with respect to such land, or "(B) the exclusion limitation. "(2) APPLICABLE PERCENTAGE.—For purposes of paragraph (1), the term 'applicable percentage' means 40 percent reduced (but not below zero) by 2 percentage points for each percentage point (or fraction thereof) by which the value of the qualified conservation easement is less than 30 percent of the value of the land (determined without regard to the value of such easement and reduced by the value of any retained development right (as defined in paragraph (5)). "(3) EXCLUSION LIMITATION.—For purposes of paragraph (1), the exclusion limitation is the limitation determined in accordance with the following table: "In the case of estates of The exclusion decedents dying during^ limitation is: 1998 $100,000 1999 $200,000 2000 $300,000 2001 $400,000 2002 or thereafter $500,000. "(4) TREATMENT OF CERTAIN INDEBTEDNESS.— "(A) IN GENERAL.— The exclusion provided in paragraph (1) shall not apply to the extent that the land is debtfinanced property. "(B) DEFINITIONS.— For purposes of this paragraph—
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