What percentage of the decedent's gross estate must property represent to qualify for Special Use Valuation?

To qualify for Special Use Valuation, property must represent at least 50% of the decedent's gross estate. This provision is designed to allow certain types of property, particularly farm or business property, to be assessed at a lower value for estate tax purposes if they meet certain criteria, including usage and the percentage of the estate they constitute.

The rationale behind requiring 50% is to ensure that the special valuation benefits are targeted to estates that primarily consist of working assets, as opposed to those that might only incidentally include such properties. By establishing this threshold, the IRS aims to maintain a balance between providing relief to qualified estates and ensuring that the estate tax base is not eroded excessively. This percentage requirement highlights the importance of the property type in the estate planning process, especially for family farms and businesses intended to remain operational after the owner's death.