[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 867 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                 S. 867

  To amend the Internal Revenue Code of 1986 to increase the unified 
   credit exemption and the qualified family-owned business interest 
                   deduction, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 10, 2001

Mr. Conrad (for himself and Mr. Cochran) 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 
   credit exemption and the qualified family-owned business interest 
                   deduction, 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.

    (a) Short Title.--This Act may be cited as the ``Estate Tax Reform 
Act of 2001''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.

SEC. 2. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE AND GIFT 
              TAXES.

    (a) In General.--Subsection (c) of section 2010 (relating to 
unified credit against estate tax) is amended to read as follows:
    ``(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.--The applicable 
        exclusion amount is equal to the sum of--
                    ``(A) the decedent's exclusion amount, plus
                    ``(B) in the case of a decedent described in 
                paragraph (4), the unused spousal exclusion amount.
            ``(3) Decedent's exclusion amount.--For purposes of 
        paragraph (2)(A), the decedent's exclusion amount is determined 
        in accordance with the following table:

        ``In the case of estates of decedents
                                                         The decedent's
          dying, and gifts made, during:
                                                   exclusion amount is:
                  2002...............................       $1,000,000 
                  2003...............................       $1,125,000 
                  2004...............................       $1,250,000 
                  2005...............................       $1,500,000 
                  2006 or thereafter.................       $2,000,000.
            ``(4) Unused spousal exclusion amount.--With respect to a 
        decedent whose immediately predeceased spouse died after 
        December 31, 2001, the unused spousal exclusion amount for such 
        decedent is equal to the excess of--
                    ``(A) the applicable exclusion amount allowable 
                under this subsection to the estate of such immediately 
                predeceased spouse, over
                    ``(B) the applicable exclusion amount allowed under 
                this section to the estate of such immediately 
                predeceased spouse.''
    (b) Effective Date.--The amendment made by this section shall apply 
to the estates of decedents dying, and gifts made, after December 31, 
2001.

SEC. 3. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS INTEREST DEDUCTION 
              AMOUNT.

    (a) In General.--Paragraph (2) of section 2057(a) (relating to 
family-owned business interests) is amended to read as follows:
            ``(2) Maximum deduction.--
                    ``(A) In general.--The deduction allowed by this 
                section shall not exceed the sum of--
                            ``(i) the decedent's deduction amount, plus
                            ``(ii) in the case of a decedent described 
                        in subparagraph (C), the unused spousal 
                        deduction amount.
                    ``(B) Decedent's deduction amount.--For purposes of 
                this subparagraph (A)(i), the decedent's deduction 
                amount is determined in accordance with the following 
                table:

        ``In the case of estates of decedents
                                                         The decedent's
          dying during:
                                                   deduction amount is:
                  2002...............................         $875,000 
                  2003...............................       $1,375,000 
                  2004...............................       $1,875,000 
                  2005...............................       $2,375,000 
                  2006 or thereafter.................       $3,375,000.
                    ``(C) Unused spousal deduction amount.--With 
                respect to a decedent whose immediately predeceased 
                spouse died after December 31, 2001, and the estate of 
                such immediately predeceased spouse met the 
                requirements of subsection (b)(1), the unused spousal 
                deduction amount for such decedent is equal to the 
                excess of--
                            ``(i) the decedent's deduction amount 
                        allowable under this section to the estate of 
                        such immediately predeceased spouse, over
                            ``(ii) the decedent's deduction amount 
                        allowed under this section to the estate of 
                        such immediately predeceased spouse.''
    (b) Conforming Amendments.--Section 2057(a)(3)(B) is amended--
            (1) by striking ``$675,000'' both places it appears and 
        inserting ``the decedent's deduction amount'', and
            (2) by striking ``$675,000'' in the heading and inserting 
        ``decedent's deduction amount''.
    (c) Effective Date.--The amendment made by this section shall apply 
to the estates of decedents dying, and gifts made, after December 31, 
2001.
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