Rarely is bankruptcy filing contemplated when a special use valuation election of farmland is filed.1 However, financial adversity can overtake a qualified heir or heirs who are responsible for paying the recapture tax either because of reduced farm or ranch income from production or a major catastrophe which results in a filing in bankruptcy.2 Several possible issues may arise, including the effect of bankruptcy on personal liability for the tax benefits from the special use valuation filing.3



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