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Tenn. Code Annotated - FONCE

67-4-2008(a)(11). Exemptions.

(A) Any family-owned noncorporate entity, where substantially all the activity of the entity is either:

(i) The production of passive investment income; or
(ii) The combination of the production of passive investment income and farming as defined in (a)(6)(A)(i);
(B) For purposes of this subdivision (a)(11):
(i) Family-owned means that at least ninety-five percent (95%) of the ownership units of the entity are owned by members of
the family, which means, with respect to an individual, only:
(a) An ancestor of such individual;
(b) The spouse or former spouse of such individual;
(c) A lineal descendent of such individual, of such individual's spouse or former spouse, or of a parent of such
(d) The spouse or former spouse of any lineal descendent described in subdivision (a)(11)(B)(i)(c) ; or
(e) The estate or trust of a deceased individual who, while living, was as described in any of subdivisions
(a)(11)(B)(i)(a)-(d) ;
(ii) A legally adopted child of an individual shall be treated as the child of such individual by
(iii) Passive investment income means gross receipts derived from royalties, rents, dividends, interest,
annuities, and sales or exchanges of stock or securities to the extent of any gains therefrom;