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ESTATE AND GIFT TAX CONSIDERATIONS• A qualified conservation contribution of a qualified real property interest 135was granted by the transferor or a member of his or her familyPreservation of an historically important land area or a certified historic structuredoes not qualify as a conservation purpose in this setting. Debt-financed propertyqualifies for this exclusion to the extent of the net equity in the property.To the extent that the value of this land is excluded from the estate, the basisof the land acquired at death is a carryover basis (that is, the basis is not steppedup to its fair market value at death).The exclusion amount is calculated on the basis of the value of the propertyafter the conservation easement has been placed on the property. The exclusionfrom estate taxes does not extend to the value of any development rightsretained by the decedent or donor, 136 although payment for estate taxes onretained development rights may be deferred for up to two years or until thedisposition of the property, whichever is earlier.The 40 percent estate tax exclusion for land subject to a qualified conservationeasement may be taken in addition to the maximum exclusion for qualifiedfamily-owned business interests. De minimis commercial recreational activitythat is consistent with the conservation purpose (such as the granting of huntingand fishing licenses) will not cause the property to fail to qualify under this rule.If the value of the conservation easement is less than 30 percent of the valueof the land without the easement, reduced by the value of any retained developmentrights, the exclusion percentage is reduced. The reduction in the exclusionpercentage is equal to 2 percentage points for each point that the ratio fallsbelow 30 percent. If the value of the easement is 10 percent or less of the value ofthe land before the easement, less the value of the retained development rights,the exclusion percentage is equal to zero. The maximum exclusion for land subjectto a qualified conservation easement is limited to $500,000 in 2002 andthereafter. 137(c) Time of Valuation of Gross EstateThe general rule is that the gross estate is valued as of the decedent’s date ofdeath. 138 An alternate valuation date, however, can be elected by the executor ofthe estate. The election generally allows the gross estate to be valued as of sixmonths after death for undistributed property, and as of the date of transfer fordistributions within six months of death. 139 The election is allowable, however,only when it will result in a decrease in both the value of the gross estate and thesum of the transfer tax imposed. 140135 See § 9.7.136 Retained development rights are any rights retained to use the land for a commercial purpose that is not subordinateto and directly supportive of farming purposes (for example, tree farming, ranching, viticulture, and the raisingof other agricultural or horticultural commodities). IRC § 6420.137 The granting of a qualified conservation easement is not treated as a disposition triggering the recapture provisionsof IRC § 2032A. The existence of a qualified conservation easement does not prevent the property fromsubsequently qualifying for special-use valuation treatment under that provision.138 IRC § 2031(a).139 IRC § 2032(a).140 IRC § 2032(c). 244