109 HR 1568 IH: To amend the Internal Revenue Code of 1986 to permanently reduce estate and gift tax rates to 30 percent, to increase the exclusion equivalent of the unified credit to $10,000,000, and to increase the annual gift tax exclusion to $50,000.
U.S. House of Representatives
2005-04-12
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.Estate and gift tax rates reduced to 30 percent
(a)
(1)Section 2001 of the Internal Revenue Code of 1986 (relating to estate tax) is amended by striking subsections (b) and (c) and by inserting after subsection (a) the following new subsection:
(b)The tax imposed by this section shall be the amount equal to the excess (if any) of—
(1)30 percent of the sum of—
(A)the amount of the taxable estate, and
(B)the amount of the adjusted taxable gifts, over
(2)the aggregate amount of tax paid under chapter 12 with respect to gifts made by the decedent after December 31, 1976.For purposes of paragraph (1)(B), the term adjusted taxable gifts means the total amount of the taxable gifts (within the meaning of section 2503) made by the decedent after December 31, 1976, other than gifts which are includible in the gross estate of the decedent..
(2)
(A)Section 2010(c) of such Code is amended by striking tentative
both places it appears and inserting tax
.
(B)Subsection (b) of section 2101 of such Code is amended to read as follows:
(b)The tax imposed by this section shall be the amount equal to the excess (if any) of—
(1)30 percent of the sum of—
(A)the amount of the taxable estate, and
(B)the amount of the adjusted taxable gifts, over
(2)the aggregate amount of tax paid under chapter 12 with respect to gifts made by the decedent after December 31, 1976..
(C)Subsection (b) of section 2102 of such Code is amended—
(i)by striking $13,000
each place it appears and inserting $20,000
, and
(ii)by striking $46,800
and inserting $52,500
.
(D)Section 2201 is amended—
(i)in subsection (a) by striking the rate schedule set forth in subsection (c) shall be deemed to be the rate schedule set forth in section 2001(c)
and inserting the tax determined under subsection (c) shall be deemed to be the tax determined under section 2001(b)
, and
(ii)in subsection (c) by striking tentative
each place it appears.
(b)
(1)Section 2502 of such Code is amended to read as follows:
2502.
(a)The tax imposed by section 2501 for each calendar year shall be an amount equal to 30 percent of the sum of the taxable gifts for such calendar year.
(b)The tax imposed by section 2501 shall be paid by the donor..
(2)
(A)Subchapter A of chapter 12 of such Code is amended by striking section 2504.
(B)The table of sections for such subchapter is amended by striking the item relating to section 2504.
(c)
(1)Section 901 of the Economic Growth and Tax Relief Reconciliation Act of 2001 shall not apply to title V of such Act.
(2)Subtitles A and E of title V of the Economic Growth and Tax Relief Reconciliation Act of 2001, and the amendments made by such subtitles, are hereby repealed; and the Internal Revenue Code of 1986 shall be applied as if such subtitles, and amendments, had never been enacted.
(3)Subsections (d), (e), and (f)(3) of section 511 of the Economic Growth and Tax Relief Reconciliation Act of 2001, and the amendments made by such subsections, are hereby repealed; and the Internal Revenue Code of 1986 shall be applied as if such subsections, and amendments, had never been enacted.
(d)The amendments made by this section shall apply to estates of decedents dying, and gifts made, after the date of the enactment of this Act.
2.Unified credit increased to equivalent of $10,000,000 exclusion; inflation adjustment of unified credit
(a)Subsection (c) of section 2010 of the Internal Revenue Code of 1986 (relating to applicable credit amount) is amended to read as follows:
(c)For purposes of this section, the applicable credit amount is the amount of the tax which would be determined under section 2001(b) if the amount with respect to which such tax is to be computed were the applicable exclusion amount. For purposes of the preceding sentence, the applicable exclusion amount is $10,000,000..
(b)Section 2010 of such Code is amended by redesignating subsection (d) as subsection (e) and by inserting after subsection (c) the following new subsection:
(d)Cost-of-living adjustmentIn the case of any decedent dying, and gift made, in a calendar year after 2005, the $10,000,000 amount set forth in subsection (c) shall be increased by an amount equal to—
(1)$10,000,000, multiplied by
(2)the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting calendar year 2004
for calendar year 1992
in subparagraph (B) thereof.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..
(c)The amendments made by this section shall apply to estates of decedents dying, and gifts made, after the date of the enactment of this Act.
3.Annual gift tax exclusion increased to $50,000
(a)Subsection (b) of section 2503 of the Internal Revenue Code of 1986 (relating to exclusion from gifts) is amended by striking $10,000
each place it appears and inserting $50,000
.
(b)Resetting of inflation adjustmentParagraph (2) of section 2503(b) of such Code is amended—
(1)by striking 1998
and inserting 2005
, and
(2)by striking 1997
and inserting 2004
.
(c)The amendments made by this section shall apply to gifts made after December 31, 2004.