72-16-338. Disposition or failure to use for qualified use -- additional tax. (1) There is hereby imposed an additional inheritance tax if within 10 years after the decedent's death and before the death of the qualified heir:
     (a) the qualified heir disposes of any interest in qualified real property other than by a disposition to a member of his family; or
     (b) the qualified heir ceases to use for the qualified use the qualified real property which was acquired or passed from the decedent.
     (2) The amount of additional tax imposed by (1) of this section with respect to any interest is the amount equal to the lesser of:
     (a) the adjusted tax difference attributable to such interest; or
     (b) the excess of the amount realized with respect to the interest or, in any case other than a sale or exchange at arm's length, the fair market value of the interest over the value of the interest determined under 72-16-333.
     (3) For the purposes of (2) of this section, the adjusted tax difference attributable to an interest is the amount that bears the same ratio to the adjusted tax difference with respect to the estate as determined under (4) of this section as the excess of the value of such interest for purposes of the Montana inheritance tax, determined without regard to 72-16-331 through 72-16-349, over the value of such interest determined under 72-16-333 bears to a similar excess determined for all qualified real property.
     (4) For the purposes of (3) of this section, "adjusted tax difference with respect to the estate" means the excess of what would have been the tax liability but for 72-16-333 over the tax liability. For the purposes of this subsection, "tax liability" means the tax imposed by Title 72, chapter 16.
     (5) For the purposes of this section, if the qualified heir disposes of a portion of the interest acquired by or passing to such heir or a predecessor qualified heir or there is a cessation of use of such a portion, the value determined under 72-16-333 taken into account under (2)(b) of this section with respect to such portion shall be its pro rata share of the value of the interest and the adjusted tax difference attributable to the interest taken into account with respect to the transaction involving the second or any succeeding portion shall be reduced by the amount of the tax imposed by this section with respect to all prior transactions involving portions of the interest.
     (6) In the case of an interest acquired from or passing from any decedent, if (a) or (b) of subsection (1) of this section applies to any portion of an interest, (b) or (a) of subsection (1) of this section, as the case may be, does not apply with respect to the same portion of the interest.
     (7) The additional tax imposed by this section is due on the day that is 6 months after the date of the disposition or cessation.
     (8) The qualified heir is personally liable for the additional tax with respect to his interest unless the heir has furnished bond that meets the requirements of 72-16-340.

     History: En. Sec. 7, Ch. 705, L. 1979; amd. Sec. 8, Ch. 511, L. 1983.