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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
individual;
(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
blood;
(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;