---
kind: "section"
citation: "7 C.F.R. § 1400.206"
title: "7"
number: "1400.206"
heading: "Estates."
url: "https://uscodex.org/cfr/7/1400.206"
---

# §1400.206. Estates.

- (a) For 2 program years after the program year in which a person dies, the person's estate will be considered to be actively engaged in farming if:
  - (1) **The estate, as a legal entity, makes a significant contribution of either—**
    - (i) Capital, equipment, or land or
    - (ii) A combination of capital, equipment, or land; and
  - (2) The personal representative or heirs of the estate collectively make a significant contribution of either:
    - (i) Active personal labor or active personal management or
    - (ii) The combination of active personal labor and active personal management; and
  - (3) The estate has a share of the profits or losses from the farming operation commensurate with the legal entity's contributions to the operation;
  - (4) The estate makes contributions to the farming operation that are at risk for a loss, with the level of risk being commensurate with the legal entity's claimed share of the farming operation; and
  - (5) The representative of the estate has provided a tax identification number for the estate and a copy of a court order, will, or other legal document that identifies the heir(s) and tax identification number(s) of the heir(s).
- (b) For a farming operation conducted by an estate in which the capital, land, or equipment is contributed by the estate, the capital, land, or equipment:
  - (1) To meet the requirements of [paragraph (a)](#a) of this section, must be contributed directly by the estate and must not be acquired as a loan made to, guaranteed, co-signed, or secured by any person, legal entity, or qualified pass-through entity that has an interest in the farming operation, as defined in this part; and
  - (2) To meet the requirements of paragraphs (c)(3)and [(a)(4)](#a-4) of this section, and if land, capital or equipment is acquired as a result of a loan made to, guaranteed, co-signed, or secured by the persons, legal entities, or qualified pass-through entities as defined, the loan must:
    - (i) Bear the prevailing interest rate; and
    - (ii) **Have a repayment schedule considered reasonable and customary for the area.**
- (c) After the period set forth in [paragraph (a)](#a) of this section, the deceased person's estate will not be considered to be actively engaged in farming unless, on a case by case basis, the Deputy Administrator determines, for the purpose of obtaining program payments, that the estate has not been settled.

## Notes

### Amendments

[73 FR 79273, Dec. 29, 2008, as amended at 75 FR 900, Jan. 7, 2010; 85 FR 52039, Aug. 24, 2020; 91 FR 32886, June 2, 2026]

### Authority

Authority: 7 U.S.C. 1308, 1308-1, 1308-2, 1308-3, 1308-3a, 1308-4, and 1308-5; and Title I, Pub. L. 115-123.

### Source

Source: 73 FR 79273, Dec. 29, 2008, unless otherwise noted.

### Amendments

[73 FR 79273, Dec. 29, 2008, as amended at 75 FR 900, Jan. 7, 2010; 85 FR 52039, Aug. 24, 2020; 91 FR 32886, June 2, 2026]