[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 3773 Placed on Calendar Senate (PCS)]

                                                       Calendar No. 562
111th CONGRESS
  2d Session
                                S. 3773

 To permanently extend the 2001 and 2003 tax relief provisions and to 
   provide permanent AMT relief and estate tax relief, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 13, 2010

  Mr. McConnell (for himself, Mr. Grassley, Mr. Kyl, Mr. McCain, Mr. 
 Cochran, Mr. Graham, Mr. Roberts, Mr. Cornyn, Mr. Inhofe, Mr. Ensign, 
Mr. Isakson, Mr. Brownback, Mr. Enzi, Mr. Crapo, Mr. Burr, Mr. Vitter, 
  Mr. Wicker, Mr. Chambliss, Mr. Bond, Mrs. Hutchison, Mr. Hatch, Mr. 
  Bennett, Mr. Risch, and Mr. Shelby) introduced the following bill; 
                     which was read the first time

                           September 14, 2010

            Read the second time and placed on the calendar

_______________________________________________________________________

                                 A BILL


 
 To permanently extend the 2001 and 2003 tax relief provisions and to 
   provide permanent AMT relief and estate tax relief, 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 ``Tax Hike Prevention Act of 2010''.

                     TITLE I--PERMANENT TAX RELIEF

SEC. 101. 2001 TAX RELIEF MADE PERMANENT.

    Title IX of the Economic Growth and Tax Relief Reconciliation Act 
of 2001 is repealed.

SEC. 102. 2003 TAX RELIEF MADE PERMANENT.

    Section 303 of the Jobs and Growth Tax Relief Reconciliation Act of 
2003 is repealed.

SEC. 103. TECHNICAL AND CONFORMING AMENDMENTS.

    The Secretary of the Treasury or the Secretary's delegate shall not 
later than 90 days after the date of the enactment of this Act, submit 
to the Committee on Ways and Means of the House of Representatives and 
the Committee on Finance of the Senate a draft of any technical and 
conforming changes in the Internal Revenue Code of 1986 which are 
necessary to reflect throughout such Code the purposes of the 
provisions of, and amendments made by, this Act.

               TITLE II--PERMANENT INDIVIDUAL AMT RELIEF

SEC. 201. PERMANENT INDIVIDUAL AMT RELIEF.

    (a) Modification of Alternative Minimum Tax Exemption Amount.--
            (1) In general.--Paragraph (1) of section 55(d) of the 
        Internal Revenue Code of 1986 (relating to exemption amount) is 
        amended to read as follows:
            ``(1) Exemption amount for taxpayers other than 
        corporations.--In the case of a taxpayer other than a 
        corporation, the term `exemption amount' means--
                    ``(A) the dollar amount for taxable years beginning 
                in the calendar year as specified in the table 
                contained in paragraph (4)(A) in the case of--
                            ``(i) a joint return, or
                            ``(ii) a surviving spouse,
                    ``(B) the dollar amount for taxable years beginning 
                in the calendar year as specified in the table 
                contained in paragraph (4)(B) in the case of an 
                individual who--
                            ``(i) is not a married individual, and
                            ``(ii) is not a surviving spouse,
                    ``(C) 50 percent of the dollar amount applicable 
                under paragraph (1)(A) in the case of a married 
                individual who files a separate return, and
                    ``(D) $22,500 in the case of an estate or trust.
        For purposes of this paragraph, the term `surviving spouse' has 
        the meaning given to such term by section 2(a), and marital 
        status shall be determined under section 7703.''.
            (2) Specified exemption amounts.--Section 55(d) of such 
        Code is amended by adding at the end the following new 
        paragraph:
            ``(4) Specified exemption amounts.--
                    ``(A) Taxpayers described in paragraph (1)(A).--For 
                purposes of paragraph (1))(A)--


------------------------------------------------------------------------
                                                                 The
             ``For taxable years beginning in--               exemption
                                                              amount is:
------------------------------------------------------------------------
2010.......................................................      $72,450
2011.......................................................      $74,450
2012.......................................................      $78,250
2013.......................................................      $81,450
2014.......................................................      $85,050
2015.......................................................      $88,650
2016.......................................................      $92,650
2017.......................................................      $96,550
2018.......................................................     $100,950
2019.......................................................     $105,150
2020.......................................................    $109,950.
------------------------------------------------------------------------

                    ``(B) Taxpayers described in paragraph (1)(B).--For 
                purposes of paragraph (1))(B)--


------------------------------------------------------------------------
                                                                 The
             ``For taxable years beginning in--               exemption
                                                              amount is:
------------------------------------------------------------------------
2010.......................................................      $47,450
2011.......................................................      $48,450
2012.......................................................      $50,350
2013.......................................................      $51,950
2014.......................................................      $53,750
2015.......................................................      $55,550
2016.......................................................      $57,550
2017.......................................................      $59,500
2018.......................................................      $61,700
2019.......................................................      $63,800
2020.......................................................  $66,200.''.
------------------------------------------------------------------------

    (b) Alternative Minimum Tax Relief for Nonrefundable Credits.--
            (1) In general.--Subsection (a) of section 26 of the 
        Internal Revenue Code of 1986 is amended to read as follows:
    ``(a) Limitation Based on Amount of Tax.--The aggregate amount of 
credits allowed by this subpart for the taxable year shall not exceed 
the sum of--
            ``(1) the taxpayer's regular tax liability for the taxable 
        year reduced by the foreign tax credit allowable under section 
        27(a), and
            ``(2) the tax imposed by section 55(a) for the taxable 
        year.''.
            (2) Conforming amendments.--
                    (A) Adoption credit.--
                            (i) Section 23(b) of such Code is amended 
                        by striking paragraph (4).
                            (ii) Section 23(c) of such Code is amended 
                        by striking paragraphs (1) and (2) and 
                        inserting the following:
            ``(1) In general.--If the credit allowable under subsection 
        (a) for any taxable year exceeds the limitation imposed by 
        section 26(a) for such taxable year reduced by the sum of the 
        credits allowable under this subpart (other than this section 
        and sections 25D and 1400C), such excess shall be carried to 
        the succeeding taxable year and added to the credit allowable 
        under subsection (a) for such taxable year.''.
                            (iii) Section 23(c) of such Code is amended 
                        by redesignating paragraph (3) as paragraph 
                        (2).
                    (B) Child tax credit.--
                            (i) Section 24(b) of such Code is amended 
                        by striking paragraph (3).
                            (ii) Section 24(d)(1) of such Code is 
                        amended--
                                    (I) by striking ``section 26(a)(2) 
                                or subsection (b)(3), as the case may 
                                be,'' each place it appears in 
                                subparagraphs (A) and (B) and inserting 
                                ``section 26(a)'', and
                                    (II) by striking ``section 26(a)(2) 
                                or subsection (b)(3), as the case may 
                                be'' in the second last sentence and 
                                inserting ``section 26(a)''.
                    (C) Credit for interest on certain home 
                mortgages.--Section 25(e)(1)(C) of such Code is amended 
                to read as follows:
                    ``(C) Applicable tax limit.--For purposes of this 
                paragraph, the term `applicable tax limit' means the 
                limitation imposed by section 26(a) for the taxable 
                year reduced by the sum of the credits allowable under 
                this subpart (other than this section and sections 23, 
                25D, and 1400C).''.
                    (D) Savers' credit.--Section 25B of such Code is 
                amended by striking subsection (g).
                    (E) Residential energy efficient property.--Section 
                25D(c) of such Code is amended to read as follows:
    ``(c) Carryforward of Unused Credit.--If the credit allowable under 
subsection (a) exceeds the limitation imposed by section 26(a) for such 
taxable year reduced by the sum of the credits allowable under this 
subpart (other than this section), such excess shall be carried to the 
succeeding taxable year and added to the credit allowable under 
subsection (a) for such succeeding taxable year.''.
                    (F) Certain plug-in electric vehicles.--Section 
                30(c)(2) of such Code is amended to read as follows:
            ``(2) Personal credit.--For purposes of this title, the 
        credit allowed under subsection (a) for any taxable year 
        (determined after application of paragraph (1)) shall be 
        treated as a credit allowable under subpart A for such taxable 
        year.''.
                    (G) Alternative motor vehicle credit.--Section 
                30B(g)(2) of such Code is amended to read as follows:
            ``(2) Personal credit.--For purposes of this title, the 
        credit allowed under subsection (a) for any taxable year 
        (determined after application of paragraph (1)) shall be 
        treated as a credit allowable under subpart A for such taxable 
        year.''.
                    (H) New qualified plug-in electric vehicle 
                credit.--Section 30D(c)(2) of such Code is amended to 
                read as follows:
            ``(2) Personal credit.--For purposes of this title, the 
        credit allowed under subsection (a) for any taxable year 
        (determined after application of paragraph (1)) shall be 
        treated as a credit allowable under subpart A for such taxable 
        year.''.
                    (I) Cross references.--Section 55(c)(3) of such 
                Code is amended by striking ``26(a), 30C(d)(2),'' and 
                inserting ``30C(d)(2)''.
                    (J) Foreign tax credit.--Section 904 of such Code 
                is amended by striking subsection (i) and by 
                redesignating subsections (j) , (k), and (l) as 
                subsections (i), (j), and (k), respectively.
                    (K) First-time home buyer credit for the district 
                of columbia.--Section 1400C(d) of such Code is amended 
                to read as follows:
    ``(d) Carryforward of Unused Credit.--If the credit allowable under 
subsection (a) exceeds the limitation imposed by section 26(a) for such 
taxable year reduced by the sum of the credits allowable under subpart 
A of part IV of subchapter A (other than this section and section 25D), 
such excess shall be carried to the succeeding taxable year and added 
to the credit allowable under subsection (a) for such taxable year.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2009.

                 TITLE III--PERMANENT ESTATE TAX RELIEF

SEC. 301. APPLICATION OF ESTATE, GENERATION-SKIPPING TRANSFER, AND GIFT 
              TAXES AFTER 2009.

    (a) In General.--The following provisions of the Economic Growth 
and Tax Relief Reconciliation Act of 2001, and the amendments made by 
such provisions, are repealed on and after January 1, 2010, with 
respect to decedents dying on and after such date, and on and after 
January 1, 2011, with respect to gifts made and generation-skipping 
transfers on and after such date:
            (1) Subtitles A and E of title V.
            (2) Subsection (d), and so much of subsection (f)(3) as 
        relates to subsection (d), of section 511.
            (3) Paragraph (2) of subsection (b), and paragraph (2) of 
        subsection (e), of section 521.
Except in the case of an election under section 404, the Internal 
Revenue Code of 1986 shall be applied as if such provisions and 
amendments had never been enacted.
    (b) Conforming Amendment.--Subsection (c) of section 2511 of the 
Internal Revenue Code of 1986 is repealed on and after January 1, 2011, 
with respect to gifts made on and after such date.

SEC. 302. TREATMENT OF UNIFIED CREDIT AND MAXIMUM ESTATE TAX RATE AFTER 
              2009.

    (a) Restoration of Unified Credit Against Gift Tax.--Paragraph (1) 
of section 2505(a) of the Internal Revenue Code of 1986 (relating to 
general rule for unified credit against gift tax), after the 
application of section _01, is amended by striking ``(determined as if 
the applicable exclusion amount were $1,000,000)''.
    (b) Exclusion Equivalent of Unified Credit Equal to $5,000,000.--
Subsection (c) of section 2010 of the Internal Revenue Code of 1986 
(relating to unified credit against estate tax) is amended to read as 
follows:
    ``(c) Applicable Credit Amount.--
            ``(1) In general.--For purposes of this section, the 
        applicable credit amount is the amount of the tentative tax 
        which would be determined under section 2001(c) if the amount 
        with respect to which such tentative tax is to be computed were 
        equal to the applicable exclusion amount.
            ``(2) Applicable exclusion amount.--
                    ``(A) In general.--For purposes of this subsection, 
                the applicable exclusion amount is $5,000,000.
                    ``(B) Inflation adjustment.--In the case of any 
                decedent dying in a calendar year after 2010, the 
                dollar amount 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 such 
                        calendar year by substituting `calendar year 
                        2009' 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) Maximum Estate Tax Rate Equal to 35 Percent.--
            (1) In general.--Subsection (c) of section 2001 of the 
        Internal Revenue Code of 1986 (relating to imposition and rate 
        of tax) is amended--
                    (A) by striking ``Over $500,000'' and all that 
                follows in the table contained in paragraph (1) and 
                insert the following:


``Over $500,000..............................  $79,300, plus 35 percent of the excess of such amount over
                                                $500,000.'',
 

                    (B) by striking ``(1) In general.--'', and
                    (C) by striking paragraph (2).
            (2) Conforming amendment.--Paragraphs (1) and (2) of 
        section 2102(b) of such Code are amended to read as follows:
            ``(1) In general.--A credit in an amount that would be 
        determined under section 2010 as the applicable credit amount 
        if the applicable exclusion amount were $60,000 shall be 
        allowed against the tax imposed by section 2101.
            ``(2) Residents of possessions of the united states.--In 
        the case of a decedent who is considered to be a `nonresident 
        not a citizen of the United States' under section 2209, the 
        credit allowed under this subsection shall not be less than the 
        proportion of the amount that would be determined under section 
        2010 as the applicable credit amount if the applicable 
        exclusion amount were $175,000 which the value of that part of 
        the decedent's gross estate which at the time of the decedent's 
        death is situated in the United States bears to the value of 
        the decedent's entire gross estate, wherever situated.''.
    (d) Modifications of Estate and Gift Taxes to Reflect Differences 
in Unified Credit Resulting From Different Tax Rates.--
            (1) Estate tax.--
                    (A) In general.--Section 2001(b)(2) of the Internal 
                Revenue Code of 1986 (relating to computation of tax) 
                is amended by striking ``if the provisions of 
                subsection (c) (as in effect at the decedent's death)'' 
                and inserting ``if the modifications described in 
                subsection (g)''.
                    (B) Modifications.--Section 2001 of such Code is 
                amended by adding at the end the following new 
                subsection:
    ``(g) Modifications to Gift Tax Payable to Reflect Different Tax 
Rates.--For purposes of applying subsection (b)(2) with respect to 1 or 
more gifts, the rates of tax under subsection (c) in effect at the 
decedent's death shall, in lieu of the rates of tax in effect at the 
time of such gifts, be used both to compute--
            ``(1) the tax imposed by chapter 12 with respect to such 
        gifts, and
            ``(2) the credit allowed against such tax under section 
        2505, including in computing--
                    ``(A) the applicable credit amount under section 
                2505(a)(1), and
                    ``(B) the sum of the amounts allowed as a credit 
                for all preceding periods under section 2505(a)(2).
        For purposes of paragraph (2)(A), the applicable credit amount 
        for any calendar year before 1998 is the amount which would be 
        determined under section 2010(c) if the applicable exclusion 
        amount were the dollar amount under section 6018(a)(1) for such 
        year.''.
            (2) Gift tax.--Section 2505(a) of such Code (relating to 
        unified credit against gift tax) is amended by adding at the 
        end the following new flush sentence:
``For purposes of applying paragraph (2) for any calendar year, the 
rates of tax in effect under section 2502(a)(2) for such calendar year 
shall, in lieu of the rates of tax in effect for preceding calendar 
periods, be used in determining the amounts allowable as a credit under 
this section for all preceding calendar periods.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to estates of decedents dying, generation-skipping transfers, and 
gifts made, after December 31, 2009.

SEC. 303. UNIFIED CREDIT INCREASED BY UNUSED UNIFIED CREDIT OF DECEASED 
              SPOUSE.

    (a) In General.--Section 2010(c) of the Internal Revenue Code of 
1986, as amended by section 302(b), is amended by striking paragraph 
(2) and inserting the following new paragraphs:
            ``(2) Applicable exclusion amount.--For purposes of this 
        subsection, the applicable exclusion amount is the sum of--
                    ``(A) the basic exclusion amount, and
                    ``(B) in the case of a surviving spouse, the 
                aggregate deceased spousal unused exclusion amount.
            ``(3) Basic exclusion amount.--
                    ``(A) In general.--For purposes of this subsection, 
                the basic exclusion amount is $5,000,000.
                    ``(B) Inflation adjustment.--In the case of any 
                decedent dying in a calendar year after 2010, the 
                dollar amount 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 such 
                        calendar year by substituting `calendar year 
                        2009' 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.
            ``(4) Aggregate deceased spousal unused exclusion amount.--
        For purposes of this subsection, the term `aggregate deceased 
        spousal unused exclusion amount' means the lesser of--
                    ``(A) the basic exclusion amount, or
                    ``(B) the sum of the deceased spousal unused 
                exclusion amounts computed with respect to each 
                deceased spouse of the surviving spouse.
            ``(5) Deceased spousal unused exclusion amount.--For 
        purposes of this subsection, the term `deceased spousal unused 
        exclusion amount' means, with respect to the surviving spouse 
        of any deceased spouse dying after December 31, 2009, the 
        excess (if any) of--
                    ``(A) the basic exclusion amount of the deceased 
                spouse, over
                    ``(B) the amount with respect to which the 
                tentative tax is determined under section 2001(b)(1) on 
                the estate of such deceased spouse.
            ``(6) Special rules.--
                    ``(A) Election required.--A deceased spousal unused 
                exclusion amount may not be taken into account by a 
                surviving spouse under paragraph (5) unless the 
                executor of the estate of the deceased spouse files an 
                estate tax return on which such amount is computed and 
                makes an election on such return that such amount may 
                be so taken into account. Such election, once made, 
                shall be irrevocable. No election may be made under 
                this subparagraph if such return is filed after the 
                time prescribed by law (including extensions) for 
                filing such return.
                    ``(B) Examination of prior returns after expiration 
                of period of limitations with respect to deceased 
                spousal unused exclusion amount.--Notwithstanding any 
                period of limitation in section 6501, after the time 
                has expired under section 6501 within which a tax may 
                be assessed under chapter 11 or 12 with respect to a 
                deceased spousal unused exclusion amount, the Secretary 
                may examine a return of the deceased spouse to make 
                determinations with respect to such amount for purposes 
                of carrying out this subsection.
            ``(7) Regulations.--The Secretary shall prescribe such 
        regulations as may be necessary or appropriate to carry out 
        this subsection.''.
    (b) Conforming Amendments.--
            (1) Paragraph (1) of section 2505(a) of the Internal 
        Revenue Code of 1986, as amended by section 302(a), is amended 
        to read as follows:
            ``(1) the applicable credit amount in effect under section 
        2010(c) which would apply if the donor died as of the end of 
        the calendar year, reduced by''.
            (2) Section 2631(c) of such Code is amended by striking 
        ``the applicable exclusion amount'' and inserting ``the basic 
        exclusion amount''.
            (3) Section 6018(a)(1) of such Code is amended by striking 
        ``applicable exclusion amount'' and inserting ``basic exclusion 
        amount''.
    (c) Effective Date.--The amendments made by this section shall 
apply to estates of decedents dying, generation-skipping transfers, and 
gifts made, after December 31, 2009.

SEC. 304. SPECIAL ELECTION FOR DECEDENTS DYING IN 2010.

    In the case of any decedent dying in 2010, the executor of the 
estate of such decedent may elect to apply the Internal Revenue Code of 
1986 without regard to the provisions of, and the amendments made by, 
this title (other than this section). Such election shall be made at 
such time and in such manner as the Secretary of the Treasury shall 
provide.
                                                       Calendar No. 562

111th CONGRESS

  2d Session

                                S. 3773

_______________________________________________________________________

                                 A BILL

 To permanently extend the 2001 and 2003 tax relief provisions and to 
   provide permanent AMT relief and estate tax relief, and for other 
                               purposes.

_______________________________________________________________________

                           September 14, 2010

            Read the second time and placed on the calendar