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          64:80:04:04.  Growing crops. The value of a decedent's interest in growing agricultural products shall be included in the decedent's taxable estate. To determine the date of death value of growing agricultural products, the following factors shall be used:

          (1)  A equals the Agricultural Stabilization Conservation Service (ASCS) proven or established yield, as determined by ASCS, or, if there is no proven or established yield, then the county average, to arrive at the probable number of bushels, tons, or other recognized agricultural unit measure of production;

          (2)  B equals the number of acres in production;

          (3)  C equals the contract price or, if there is none, the price paid per unit measure by local elevators or another recognized agricultural market;

          (4)  D equals the unpaid costs of producing, harvesting, and marketing the agricultural product;

          (5)  E equals federal or state agricultural program payments, which include deficiency payments, disaster payments, ACP (agricultural conservation practice) payments, or other types of agricultural assistance program payments; and

          (6)  F equals decedent's ownership interest in the agricultural product expressed as a percentage.

          Using the factors in this section, the following formula shall be used:  {[(A x B x C) – D] + E} x F = decedent's taxable value in growing agricultural products.

          Source: 16 SDR 76, effective November 1, 1989.

          General Authority: SDCL 10-41-9.

          Law Implemented: SDCL 10-40-26.

          Example:

          Mr. Farmer died on July 30, 1989. On the date of his death, he had a 50 percent interest in 500 acres of an agricultural product planted on his land. He was entitled to $150 for this crop in federal disaster payments at the time of his death. The local elevator was paying $1.00 per bushel for the agricultural product as of July 30, 1989. The estimated yield was 25 bushels per acre. The unpaid cost of producing the product was $200. Using the formula, the taxable value of decedent's interest in the agricultural product is calculated as follows:

               {[(25 x 500 x $1) - $200] + $150} x 50% = $6225.

          25

$12,500

$12,300

$12,450

      x500

  -    200

 +    150

    x  .50

      x  $1

$12,300

$12,450

$  6,225

$12,500

 

 

 

 


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