[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 849 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                 S. 849

  To amend the Internal Revenue Code of 1986 to increase the unified 
 estate and gift tax credit to exempt farms and small businesses from 
                 estate taxes, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              June 9, 1997

  Mr. Faircloth (for himself and Mr. Helms) 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 increase the unified 
 estate and gift tax credit to exempt farms and small businesses from 
                 estate taxes, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``American Farm Heritage and Small 
Business Preservation Act''.

SEC. 2. INCREASE IN UNIFIED ESTATE AND GIFT TAX CREDIT.

    (a) Estate Tax Credit.--
            (1) In general.--Section 2010(a) of the Internal Revenue 
        Code of 1986 (relating to unified credit against estate tax) is 
        amended by striking ``$192,800'' and inserting ``the applicable 
        credit amount''.
            (2) Applicable credit amount.--Section 2010 of such Code is 
        amended by redesignating subsection (c) as subsection (d) and 
        by inserting after subsection (b) the following new subsection:
    ``(c) Applicable Credit Amount.--For purposes of this section--
            ``(1) In general.--The applicable credit amount is the 
        amount of the tentative tax which would be determined under the 
        rate schedule set forth in section 2001(c) if the amount with 
        respect to which such tentative tax is to be computed were the 
        applicable exclusion amount.
            ``(2) Applicable exclusion amount.--
                    ``(A) In general.--The applicable exclusion amount 
                is $1,500,000.
                    ``(B) Inflation adjustment.--
                            ``(i) In general.--In the case of any 
                        calendar year beginning after 1998, the dollar 
                        amount referred to in subparagraph (A) shall be 
                        increased by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the cost-of-living 
                                adjustment determined under section 
                                (1)(f)(3) for the calendar year, by 
                                substituting `1997' for `1992'.
                            ``(ii) Rounding.--If any amount as adjusted 
                        under clause (i) is not a multiple of $500, 
                        such amount shall be rounded to the nearest 
                        multiple of $500. ''
            (3) Conforming amendments.--
                    (A) Section 6018(a)(1) of such Code is amended by 
                striking ``$600,000'' and inserting ``the applicable 
                exclusion amount in effect under section 2010(c) for 
                the calendar year which includes the date of death''.
                    (B) Section 2001(c)(2) of such Code is amended by 
                striking ``$21,040,000'' and inserting ``the amount at 
                which the average tax rate under this section is 55 
                percent''.
                    (C) Section 2102(c)(3)(A) of such Code is amended 
                by striking ``$192,800'' and inserting ``the applicable 
                credit amount in effect under section 2010(c) for the 
                calendar year which includes the date of death''.
    (b) Unified Gift Tax Credit.--Section 2505(a)(1) of the Internal 
Revenue Code of 1986 (relating to unified credit against gift tax) is 
amended by striking ``$192,800'' and inserting ``the applicable credit 
amount in effect under section 2010(c) for such calendar year''.
    (c) Effective Date.--The amendments made by this section shall 
apply to the estates of decedents dying, and gifts made, after December 
31, 1997.
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