I 111th CONGRESS 1st Session H. R. 3841 IN THE HOUSE OF REPRESENTATIVES October 15, 2009 Mr. Schrader 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 repeal carryover basis for decedents dying in 2009, to increase the estate tax exemption to $5,000,000, and to reduce the maximum estate and gift tax rate to 45 percent.

1.

Short title

This Act may be cited as the Small Business and Family Farm Estate Tax Relief Act of 2009.

2.

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the Economic Growth and Tax Relief Reconciliation Act of 2001, and the amendments made by such subtitles, are hereby repealed; and the Internal Revenue Code of 1986 shall be applied as if such subtitles, and amendments, had never been enacted.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

Section 901 of the Economic Growth and Tax Relief Reconciliation Act of 2001 shall not apply to title V of such Act. (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the Economic Growth and Tax Relief Reconciliation Act of 2001, and the amendments made by such subsections, are hereby repealed; and the Internal Revenue Code of 1986 shall be applied as if such subsections, and amendments, had never been enacted.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.

Modifications to estate and gift tax

(a)

$5,000,000 applicable exclusion amount

Subsection (c) of section 2010 of the Internal Revenue Code of 1986 (relating to applicable credit amount) is amended by striking all that follows the applicable exclusion amount and inserting . For purposes of the preceding sentence, the applicable exclusion amount is $5,000,000.. (b)

Freeze maximum estate and gift tax rates at 45 percent

Paragraph (1) of section 2001(c) of such Code is amended by striking the last 3 items in the table and inserting the following new item: Over $1,500,000$555,800, plus 45 percent of the excess of such amount over $1,500,000. . (c)

Effective date

The amendments made by this section shall apply to estates of decedents dying, and gifts made, after December 31, 2009.