S 3049 ISCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to make the capital gains and dividends rate permanent and to provide estate tax relief and reform, and for other purposes.CommentsClose CommentsPermalink

May 22, 2008

Mr. ALEXANDER introduced the following bill; which was read twice and referred to the Committee on FinanceCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to make the capital gains and dividends rate permanent and to provide estate tax relief and reform, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. CAPITAL GAINS AND DIVIDENDS RATE MADE PERMANENT.

The Jobs and Growth Tax Relief Reconciliation Act of 2003 is amended by striking section 303.CommentsClose CommentsPermalink

SEC. 2. ESTATE TAX RELIEF AND REFORM AFTER 2009.

(a) Restoration of Unified Credit Against Gift Tax- Paragraph (1) of section 2505(a) of the Internal Revenue Code of 1986 (relating to general rule for unified credit against gift tax), after the application of subsection (f), is amended by striking `(determined as if the applicable exclusion amount were $1,000,000)'.CommentsClose CommentsPermalink





(b) Exclusion Equivalent of Unified Credit Equal to $3,500,000- Subsection (c) of section 2010 of the Internal Revenue Code of 1986 (relating to unified credit against estate tax) is amended to read as follows:CommentsClose CommentsPermalink





`(c) Applicable Credit Amount-CommentsClose CommentsPermalink





`(1) IN GENERAL- For purposes of this section, the applicable credit amount is the amount of the tentative tax which would be determined under section 2001(c) if the amount with respect to which such tentative tax is to be computed were equal to the applicable exclusion amount.CommentsClose CommentsPermalink





`(2) APPLICABLE EXCLUSION AMOUNT-CommentsClose CommentsPermalink





`(A) IN GENERAL- For purposes of this subsection, the applicable exclusion amount is $3,500,000.CommentsClose CommentsPermalink





`(B) INFLATION ADJUSTMENT- In the case of any decedent dying in a calendar year after 2009, the $3,500,000 amount in subparagraph (A) shall be increased by an amount equal to--CommentsClose CommentsPermalink





`(i) such dollar amount, multiplied byCommentsClose CommentsPermalink





`(ii) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting `calendar year 2008' for `calendar year 1992' in subparagraph (B) thereof.CommentsClose CommentsPermalink





If any amount as adjusted under the preceding sentence is not a multiple of $10,000, such amount shall be rounded to the nearest multiple of $10,000.'.CommentsClose CommentsPermalink





(c) Flat Estate and Gift Tax Rates-CommentsClose CommentsPermalink





(1) IN GENERAL- Subsection (c) of section 2001 of the Internal Revenue Code of 1986 (relating to imposition and rate of tax) is amended to read as follows:CommentsClose CommentsPermalink





`(c) Tentative Tax- The tentative tax is 15 percent of the amount with respect to which the tentative tax is to be computed.'.CommentsClose CommentsPermalink





(2) CONFORMING AMENDMENTS-CommentsClose CommentsPermalink





(A) Paragraphs (1) and (2) of section 2102(b) of such Code are amended to read as follows:CommentsClose CommentsPermalink





`(1) IN GENERAL- A credit in an amount that would be determined under section 2010 as the applicable credit amount if the applicable exclusion amount were $60,000 shall be allowed against the tax imposed by section 2101.CommentsClose CommentsPermalink





`(2) RESIDENTS OF POSSESSIONS OF THE UNITED STATES- In the case of a decedent who is considered to be a `nonresident not a citizen of the United States' under section 2209, the credit allowed under this subsection shall not be less than the proportion of the amount that would be determined under section 2010 as the applicable credit amount if the applicable exclusion amount were $175,000 which the value of that part of the decedent's gross estate which at the time of the decedent's death is situated in the United States bears to the value of the decedent's entire gross estate, wherever situated.'.CommentsClose CommentsPermalink





(B) Section 2502(a) of such Code (relating to computation of tax), after the application of subsection (f), is amended by adding at the end the following flush sentence:CommentsClose CommentsPermalink





`In computing the tentative tax under section 2001(c) for purposes of this subsection, `the last day of the calendar year in which the gift was made' shall be substituted for `the date of the decedent's death' each place it appears in such section.'.CommentsClose CommentsPermalink





(d) Modifications of Estate and Gift Taxes To Reflect Differences in Unified Credit Resulting From Different Tax Rates-CommentsClose CommentsPermalink





(1) ESTATE TAX-CommentsClose CommentsPermalink





(A) IN GENERAL- Section 2001(b)(2) of the Internal Revenue Code of 1986 (relating to computation of tax) is amended by striking `if the provisions of subsection (c) (as in effect at the decedent's death)' and inserting `if the modifications described in subsection (g)'.CommentsClose CommentsPermalink





(B) MODIFICATIONS- Section 2001 of such Code is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





`(g) Modifications to Gift Tax Payable To Reflect Different Tax Rates- For purposes of applying subsection (b)(2) with respect to 1 or more gifts, the rates of tax under subsection (c) in effect at the decedent's death shall, in lieu of the rates of tax in effect at the time of such gifts, be used both to compute--CommentsClose CommentsPermalink





`(1) the tax imposed by chapter 12 with respect to such gifts, andCommentsClose CommentsPermalink





`(2) the credit allowed against such tax under section 2505, including in computing--CommentsClose CommentsPermalink





`(A) the applicable credit amount under section 2505(a)(1), andCommentsClose CommentsPermalink





`(B) the sum of the amounts allowed as a credit for all preceding periods under section 2505(a)(2).CommentsClose CommentsPermalink





For purposes of paragraph (2)(A), the applicable credit amount for any calendar year before 1998 is the amount which would be determined under section 2010(c) if the applicable exclusion amount were the dollar amount under section 6018(a)(1) for such year.'.CommentsClose CommentsPermalink





(2) GIFT TAX- Section 2505(a) of such Code (relating to unified credit against gift tax) is amended by adding at the end the following new flush sentence:CommentsClose CommentsPermalink





`For purposes of applying paragraph (2) for any calendar year, the rates of tax in effect under section 2502(a)(2) for such calendar year shall, in lieu of the rates of tax in effect for preceding calendar periods, be used in determining the amounts allowable as a credit under this section for all preceding calendar periods.'.CommentsClose CommentsPermalink





(e) Effective Date- The amendments made by this section shall apply to estates of decedents dying, generation-skipping transfers, and gifts made, after December 31, 2009.CommentsClose CommentsPermalink





(f) Additional Modifications to Estate Tax-CommentsClose CommentsPermalink





(1) IN GENERAL- The following provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001, and the amendments made by such provisions, are hereby repealed:CommentsClose CommentsPermalink





(A) Subtitles A and E of title V.CommentsClose CommentsPermalink





(B) Subsection (d), and so much of subsection (f)(3) as relates to subsection (d), of section 511.CommentsClose CommentsPermalink





(C) Paragraph (2) of subsection (b), and paragraph (2) of subsection (e), of section 521.CommentsClose CommentsPermalink





The Internal Revenue Code of 1986 shall be applied as if such provisions and amendments had never been enacted.CommentsClose CommentsPermalink





(2) SUNSET NOT TO APPLY TO TITLE V OF EGTRRA- Section 901 of the Economic Growth and Tax Relief Reconciliation Act of 2001 shall not apply to title V of such Act.CommentsClose CommentsPermalink





(3) REPEAL OF DEADWOOD-CommentsClose CommentsPermalink





(A) Sections 2011, 2057, and 2604 of the Internal Revenue Code of 1986 are hereby repealed.CommentsClose CommentsPermalink





(B) The table of sections for part II of subchapter A of chapter 11 of such Code is amended by striking the item relating to section 2011.CommentsClose CommentsPermalink





(C) The table of sections for part IV of subchapter A of chapter 11 of such Code is amended by striking the item relating to section 2057.CommentsClose CommentsPermalink





(D) The table of sections for subchapter A of chapter 13 of such Code is amended by striking the item relating to section 2604.CommentsClose CommentsPermalink