[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 2445 Introduced in Senate (IS)]

103d CONGRESS
  2d Session
                                S. 2445

 To amend the Internal Revenue Code of 1986 to limit the applicability 
                of the generation-skipping transfer tax.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

           September 21 (legislative day, September 12), 1994

   Mr. Danforth (for himself, Mr. Boren, Mr. Wallop, Mr. Pryor, Mr. 
 Grassley, Mr. Baucus, Mr. Chafee, Mr. Riegle, Mr. Roth, Mr. Daschle, 
and Mr. Breaux) introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to limit the applicability 
                of the generation-skipping transfer tax.

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

SECTION 1. LIMITATION ON APPLICABILITY OF GENERATION-SKIPPING TRANSFER 
              TAX.

    (a) In General.--Section 2651 of the Internal Revenue Code of 1986 
(relating to generation assignment) is amended by redesignating 
subsection (e) as subsection (f), and by inserting after subsection (d) 
the following new subsection:
    ``(e) Special Rule for Persons With a Deceased Parent.--
            ``(1) In general.--For purposes of determining whether any 
        transfer is a generation-skipping transfer, if--
                    ``(A) an individual who has an interest in property 
                is a descendant of a parent of the transferor (or the 
                transferor's spouse or former spouse), and
                    ``(B) such individual's parent who is a lineal 
                descendant of the parent of the transferor (or the 
                transferor's spouse or former spouse) is dead at the 
                time the transfer from which such interest is 
                established or derived is subject to a tax imposed by 
                chapter 11 or 12 upon the transferor (and if there 
                shall be more than 1 such time, then at the latest such 
                time),
        such individual shall be treated as if such individual were a 
        member of the generation which is 1 generation below the lower 
        of the transferor's generation or the generation assignment of 
        the youngest living ancestor of such individual who is also a 
        descendant of the parent of the transferor (or the transferor's 
        spouse or former spouse), and the generation assignment of any 
        descendant of such individual shall be adjusted accordingly.
            ``(2) Limited application of subsection to collateral 
        heirs.--This subsection shall not apply to any individual who 
        is not a lineal descendant of the transferor (or the 
        transferor's spouse or former spouse) if, at the time of the 
        transfer, such transferor has any living lineal descendant.''
    (b) Conforming Amendments.--
            (1) Section 2612(c) of the Internal Revenue Code of 1986 
        (defining direct skip) is amended by striking paragraph (2) and 
        by redesignating paragraph (3) as paragraph (2).
            (2) Section 2612(c)(2) of such Code (as so redesignated) is 
        amended by striking ``section 2651(e)(2)'' and inserting 
        ``section 2651(f)(2)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to terminations, distributions, and transfers occurring after the 
date of the enactment of this section.
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