Estates that claim the qualified small business property or qualified farm property deduction are subject to a three-year holding period.
If the qualified heirs do not meet certain requirements during this time, the estate is subject to a Recapture Tax.
The qualifying heirs must file a Recapture Tax return and pay the tax within six months of any change that breaks the holding period requirements. File return in the Estate Recapture Tax Online Filing System
The tax is equal to 16% of the deduction amount.