Family Business Preservation Act

Family Business Preservation Act - Amends the Internal Revenue Code to reduce the rate of estate tax on certain family-owned businesses. Provides for a recapture of tax benefits if the business is not held for at least ten years by the heirs or the heirs do not materially participate during such ten years.

Provides that the limitation on the four percent rate of interest on estate tax extended for estates consisting largely of a closely held business is not applicable to estate tax attributable to qualified family-owned business interests.

Extends the alternate valuation date from six months to 40 months for estates consisting largely of qualified family-owned business interests.

Increases the tax exclusion for gifts to ancestors or descendants.

Increases the unified estate and gift tax credits.