110 HR 4235 IH: Estate Tax Reduction Act of 2007 U.S. House of Representatives 2007-11-15 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.

I 110th CONGRESS 1st Session H. R. 4235 IN THE HOUSE OF REPRESENTATIVES November 15, 2007 Mrs. Lowey introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to restore the estate tax, to repeal the carryover basis rule, to reduce estate tax rates by 20 percent, to increase the unified credit against estate and gift taxes to the equivalent of a $3,000,000 exclusion and to provide an inflation adjustment of such amount, and for other purposes.

1.

Short title

This Act may be cited as the Estate Tax Reduction Act of 2007.

2.

Restoration of estate tax; repeal of carryover basis

(a)

In general

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of the Economic Growth and Tax Relief Reconciliation Act of 2001, and the amendments made by such subtitles, are hereby repealed; and the Internal Revenue Code of 1986 shall be applied as if such subtitles, and amendments, had never been enacted. (b)

Sunset not To apply

(1)Subsection (a) of section 901 of the Economic Growth and Tax Relief Reconciliation Act of 2001 is amended by striking this Act and all that follows and inserting this Act (other than title V) shall not apply to taxable, plan, or limitation years beginning after December 31, 2010.. (2)Subsection (b) of such section 901 is amended by striking , estates, gifts, and transfers. (c)

Conforming amendments

Subsections (d) and (e) 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the Economic Growth and Tax Relief Reconciliation Act of 2001, and the amendments made by such subsections, are hereby repealed; and the Internal Revenue Code of 1986 shall be applied as if such subsections, and amendments, had never been enacted.

3.

20 percent reduction in estate tax rates

(a)

In general

Subsection (c) of section 2001 of the Internal Revenue Code of 1986 is amended to read as follows: (c)

Rate schedule

If the amount with respect to which the tentative tax is to be computed is:The tentative tax is:Not over $10,00014.4% of such amount.Over $10,000 but not over $20,000$1,440, plus 16% of the excess of such amount over $10,000.Over $20,000 but not over $40,000$3,040, plus 17.6% of the excess of such amount over $20,000.Over $40,000 but not over $60,000$6,560, plus 19.2% of the excess of such amount over $40,000.Over $60,000 but not over $80,000$10,400, plus 20.8% of the excess of such amount over $60,000.Over $80,000 but not over $100,000$14,560, plus 22.4% of the excess of such amount over $80,000.Over $100,000 but not over $150,000$19,040, plus 24% of the excess of such amount over $100,000.Over $150,000 but not over $250,000$31,040, plus 25.6% of the excess of such amount over $150,000.Over $250,000 but not over $500,000$56,640, plus 27.2% of the excess of such amount over $250,000.Over $500,000 but not over $750,000$124,640, plus 29.6% of the excess of such amount over $500,000.Over $750,000 but not over $1,000,000$198,640, plus 31.2% of the excess of such amount over $750,000.Over $1,000,000 but not over $1,250,000$276,640, plus 32.8% of the excess of such amount over $1,000,000.Over $1,250,000 but not over $1,500,000$358,640, plus 34.4% of the excess of such amount over $1,250,000.Over $1,500,000 but not over $2,000,000$444,640, plus 36% of the excess of such amount over $1,500,000.Over $2,000,000$624,640, plus 39.2% of the excess of such amount over $2,000,000. . (b)

Effective date

The amendment made by this section shall apply to estates of decedents dying, and gifts made, after the date of the enactment of this Act.

4.

Unified credit increased to equivalent of $3,000,000 exclusion; inflation adjustment of unified credit

(a)

Increase in unified credit

Subsection (c) of section 2010 of the Internal Revenue Code of 1986 (relating to applicable credit amount) is amended by striking all that follows were the applicable exclusion amount and inserting . For purposes of the preceding sentence, the applicable exclusion amount is $3,000,000. (b)

Inflation adjustment

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 adjustment

In the case of any decedent dying, and gift made, in a calendar year after 2007, the $3,000,000 amount set forth in subsection (c) shall be increased by an amount equal to— (1)$3,000,000, multiplied by (2)the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting calendar year 2006 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)

Effective date

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.