1.This Act may be cited as
the Tax Hike Prevention Act of
2010
.
<enum>I</enum><header>Permanent tax
relief</header>
<section id="idB662486A55484CE0B08E6115EA9DFE78"><enum>101.</enum><header>2001 tax
relief made permanent</header><text display-inline="no-display-inline">Title IX
of the Economic Growth and Tax Relief Reconciliation Act of 2001 is
repealed.</text>
</section><section id="id61F921B5F6EB4EED9F87EE15F20F6F4F"><enum>102.</enum><header>2003 tax
relief made permanent</header><text display-inline="no-display-inline">Section
303 of the Jobs and Growth Tax Relief Reconciliation Act of 2003 is
repealed.</text>
</section><section commented="no" display-inline="no-display-inline" id="id6F0FADBBA8FE43BDB1FC80455B29BA90" section-type="subsequent-section"><enum>103.</enum><header display-inline="yes-display-inline">Technical and conforming
amendments</header><text display-inline="no-display-inline">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.</text>
</section><enum>II</enum><header>Permanent
individual AMT relief</header>
<section id="id471539BC8893415DB4C69B3AC5DF9BBA"><enum>201.</enum><header>Permanent
individual AMT relief</header>
<subsection display-inline="no-display-inline" id="id19F21567A0DC4BFBB0275E4FE77C477A"><enum>(a)</enum><header>Modification of
alternative minimum tax exemption amount</header>
<paragraph id="id39B25620A1634A2FAA3B07FEC7E8783D"><enum>(1)</enum><header>In
general</header><text>Paragraph (1) of section 55(d) of the Internal Revenue
Code of 1986 (relating to exemption amount) is amended to read as
follows:</text>
<quoted-block act-name="" id="idB119FF7BD14B4774B4251FB50775487B" style="OLC">
<paragraph id="idC35F9039DD25456DB626F2CB6D2E0B77"><enum>(1)</enum><header>Exemption
amount for taxpayers other than corporations</header><text>In the case of a
taxpayer other than a corporation, the term <term>exemption amount</term>
means—</text>
<subparagraph id="idA13DFB106A5F4FD5997F436A8872F058"><enum>(A)</enum><text>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—</text>
<clause id="id7F75CD33F0E04958981D92405D15F1F4"><enum>(i)</enum><text>a
joint return, or</text>
</clause><clause id="id4E937E2176E540D6A777BBE59DAC1D84"><enum>(ii)</enum><text>a surviving
spouse,</text>
</clause></subparagraph><subparagraph id="id723E472B4F7A463BA8F005646C5A2758"><enum>(B)</enum><text>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—</text>
<clause id="idD996C136252546ACB16C64F664E55C00"><enum>(i)</enum><text>is not a married
individual, and</text>
</clause><clause id="id27E4453F404640CD824D421D3F2E57D2"><enum>(ii)</enum><text>is not a
surviving spouse,</text>
</clause></subparagraph><subparagraph id="idA0E6FF21DD0144B09DD94A7023997082"><enum>(C)</enum><text>50 percent of the
dollar amount applicable under paragraph (1)(A) in the case of a married
individual who files a separate return, and</text>
</subparagraph><subparagraph id="id14560EF612AF4DB2801DEFFC1DA895E6"><enum>(D)</enum><text>$22,500 in the
case of an estate or trust.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">For
purposes of this paragraph, the term <term>surviving spouse</term> has the
meaning given to such term by section 2(a), and marital status shall be
determined under section
7703.</continuation-text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="idE6F69F42AB2147108BDD4DFDDF60E0E6"><enum>(2)</enum><header>Specified
exemption amounts</header><text display-inline="yes-display-inline">Section
55(d) of such Code is amended by adding at the end the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id6A01678C8A3E4C798F383BDBACAF52BB" style="OLC">
<paragraph id="id0FF1C7F752884C28A6D06522003DF451"><enum>(4)</enum><header>Specified
exemption amounts</header>
<subparagraph id="id0EFBFA1FFA764CFF80A1FEBC78C91097"><enum>(A)</enum><header>Taxpayers
described in paragraph
<enum-in-header>(1)(A)</enum-in-header></header><text>For purposes of paragraph
(1))(A)—</text>
<table align-to-level="section" blank-lines-before="1" colsep="1" frame="topbot" line-rules="hor-ver" rowsep="0" rule-weights="4.4.4.0.0.0" table-template-name="Generic: 1 text, 1 num" table-type="">
<tgroup cols="2" grid-typeface="1.1" rowsep="0" thead-tbody-ldg-size="10.10.12"><colspec coldef="txt" colname="column1" colwidth="269pts" min-data-value="200" rowsep="0"></colspec><colspec coldef="fig" colname="column2" colwidth="56pts" min-data-value="10" rowsep="0"></colspec>
<thead>
<row><entry align="center" colname="column1" morerows="0" namest="column1" rowsep="1">For taxable years beginning in—</entry><entry align="center" colname="column2" morerows="0" namest="column2" rowsep="1">The
exemption amount is:</entry>
</row>
</thead>
<tbody>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">2010</entry><entry align="right" colname="column2" rowsep="0">$72,450</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">2011</entry><entry align="right" colname="column2" rowsep="0">$74,450</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">2012</entry><entry align="right" colname="column2" rowsep="0">$78,250</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">2013</entry><entry align="right" colname="column2" rowsep="0">$81,450</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">2014</entry><entry align="right" colname="column2" rowsep="0">$85,050</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">2015</entry><entry align="right" colname="column2" rowsep="0">$88,650</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">2016</entry><entry align="right" colname="column2" rowsep="0">$92,650</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">2017</entry><entry align="right" colname="column2" rowsep="0">$96,550</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">2018</entry><entry align="right" colname="column2" rowsep="0">$100,950</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">2019</entry><entry align="right" colname="column2" rowsep="0">$105,150</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">2020</entry><entry align="right" colname="column2" rowsep="0">$109,950.</entry>
</row>
</tbody>
</tgroup>
</table>
</subparagraph><subparagraph id="idBA3CABBFF1B34D70BDFFB3D1D197F8DE"><enum>(B)</enum><header>Taxpayers
described in paragraph
<enum-in-header>(1)(B)</enum-in-header></header><text>For purposes of paragraph
(1))(B)—</text>
<table align-to-level="section" blank-lines-before="1" colsep="1" frame="topbot" line-rules="hor-ver" rowsep="0" rule-weights="4.4.4.0.0.0" table-template-name="Generic: 1 text, 1 num" table-type="">
<tgroup cols="2" grid-typeface="1.1" rowsep="0" thead-tbody-ldg-size="10.10.12"><colspec coldef="txt" colname="column1" colwidth="269pts" min-data-value="200" rowsep="0"></colspec><colspec coldef="fig" colname="column2" colwidth="56pts" min-data-value="10" rowsep="0"></colspec>
<thead>
<row><entry align="center" colname="column1" morerows="0" namest="column1" rowsep="1">For taxable years beginning in—</entry><entry align="center" colname="column2" morerows="0" namest="column2" rowsep="1">The
exemption amount is:</entry>
</row>
</thead>
<tbody>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">2010</entry><entry align="right" colname="column2" rowsep="0">$47,450</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">2011</entry><entry align="right" colname="column2" rowsep="0">$48,450</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">2012</entry><entry align="right" colname="column2" rowsep="0">$50,350</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">2013</entry><entry align="right" colname="column2" rowsep="0">$51,950</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">2014</entry><entry align="right" colname="column2" rowsep="0">$53,750</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">2015</entry><entry align="right" colname="column2" rowsep="0">$55,550</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">2016</entry><entry align="right" colname="column2" rowsep="0">$57,550</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">2017</entry><entry align="right" colname="column2" rowsep="0">$59,500</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">2018</entry><entry align="right" colname="column2" rowsep="0">$61,700</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">2019</entry><entry align="right" colname="column2" rowsep="0">$63,800</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">2020</entry><entry align="right" colname="column2" rowsep="0">$66,200.</entry>
</row>
</tbody>
</tgroup></table>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idCF9BEC40BA0846C09BEBBCD8400BA727"><enum>(b)</enum><header>Alternative
minimum tax relief for nonrefundable credits</header>
<paragraph commented="no" display-inline="no-display-inline" id="id452C860ED0974DCF97348E1D21419F40"><enum>(1)</enum><header>In
general</header><text>Subsection (a) of section 26 of the Internal Revenue Code
of 1986 is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id09E9CDBD4DF14729982BF547DB2E1964" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="id1A09B355D4044DD0ADB90EC72610C2C9"><enum>(a)</enum><header>Limitation
based on amount of tax</header><text>The aggregate amount of credits allowed by
this subpart for the taxable year shall not exceed the sum of—</text>
<paragraph id="IDb2a8530707b747c6b856f5f3130dcbf8"><enum>(1)</enum><text>the taxpayer's
regular tax liability for the taxable year reduced by the foreign tax credit
allowable under section 27(a), and</text>
</paragraph><paragraph id="ID051040f261d847bc9c2ffc3b5dbd239f"><enum>(2)</enum><text>the tax imposed
by section 55(a) for the taxable
year.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id89C3ADA275ED46DABF86B39CAC275635"><enum>(2)</enum><header>Conforming
amendments</header>
<subparagraph commented="no" display-inline="no-display-inline" id="id73138EE0740B4A55B85614952C95EE11"><enum>(A)</enum><header>Adoption
credit</header>
<clause commented="no" display-inline="no-display-inline" id="id41C1863B66154A42864C1B3C992D2620"><enum>(i)</enum><text>Section 23(b) of
such Code is amended by striking paragraph (4).</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id7E1953660A9341E99D9A60B051538C0F"><enum>(ii)</enum><text>Section 23(c) of
such Code is amended by striking paragraphs (1) and (2) and inserting the
following:</text>
<quoted-block display-inline="no-display-inline" id="id66DD68635BF84D0D83D305C610BC6B70" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="id6BC49A2C844A4AE8AD7971A84118ADC2"><enum>(1)</enum><header>In
general</header><text>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.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</clause><clause commented="no" display-inline="no-display-inline" id="idC0F1A4AC5C9B41C591A1DE217BDEBABD"><enum>(iii)</enum><text>Section 23(c)
of such Code is amended by redesignating paragraph (3) as paragraph (2).</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idBDE009A3932B49C7AF923B55077D48F3"><enum>(B)</enum><header>Child tax
credit</header>
<clause commented="no" display-inline="no-display-inline" id="id661553081055451FA3AFF9BA144FA883"><enum>(i)</enum><text>Section 24(b) of
such Code is amended by striking paragraph (3).</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idF92EB1CD23614DCEAD5AE268E2E30F22"><enum>(ii)</enum><text>Section 24(d)(1)
of such Code is amended—</text>
<subclause commented="no" display-inline="no-display-inline" id="idCC48C5BD99DE48CFB3B4F2C990C66838"><enum>(I)</enum><text>by striking
<quote>section 26(a)(2) or subsection (b)(3), as the case may be,</quote> each
place it appears in subparagraphs (A) and (B) and inserting <quote>section
26(a)</quote>, and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="idCD78A8C238494C3DBB30A95B53C4BFA3"><enum>(II)</enum><text>by striking
<quote>section 26(a)(2) or subsection (b)(3), as the case may be</quote> in the
second last sentence and inserting <quote>section 26(a)</quote>.</text>
</subclause></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idBA343BF7605B46CEA708ADDF38DD064D"><enum>(C)</enum><header>Credit for
interest on certain home mortgages</header><text>Section 25(e)(1)(C) of such
Code is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="idC0C4F0DDD863470096E134DDFCBB638C" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="id50188A0D4B824E92B9A2A2B3E5216427"><enum>(C)</enum><header>Applicable tax
limit</header><text>For purposes of this paragraph, the term <quote>applicable
tax limit</quote> 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).</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idADF4C479CB5E4E2AAE4480A684DFD25C"><enum>(D)</enum><header>Savers'
credit</header><text>Section 25B of such Code is amended by striking subsection
(g).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id2022BE4CF3244635A00481804BC7C53D"><enum>(E)</enum><header>Residential
energy efficient property</header><text>Section 25D(c) of such Code is amended
to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id9D1BFFE9F99941E6A742EDDF37606A1F" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="id0CAF65B794B74A549FAFC1D85DC827F3"><enum>(c)</enum><header>Carryforward of
unused credit</header><text>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.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id4159B053FF424B31A0225209F733B44C"><enum>(F)</enum><header>Certain plug-in
electric vehicles</header><text>Section 30(c)(2) of such Code is amended to
read as follows:</text>
<quoted-block display-inline="no-display-inline" id="idF527CC26E9D440739FEB2455528E3583" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="id23B53472C6FF4CB7B46E47E02D1DE939"><enum>(2)</enum><header>Personal
credit</header><text>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.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id390FA8313FCD4CEFA95570FAAB2C56F0"><enum>(G)</enum><header>Alternative
motor vehicle credit</header><text>Section 30B(g)(2) of such Code is amended to
read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id1A2A8871177F414696CEDD23BE4E598B" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="idBFFD545EDD214E4AAEFC1A2AEDECBDC0"><enum>(2)</enum><header>Personal
credit</header><text>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.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id0FA9ABCC036949CAB5E2FB06EA57C6A7"><enum>(H)</enum><header>New qualified
plug-in electric vehicle credit</header><text>Section 30D(c)(2) of such Code is
amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id4B9374434D1546619795FA022EF8FE9E" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="idF199DC96809F48C6BAD4AEB4E93D8EB6"><enum>(2)</enum><header>Personal
credit</header><text>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.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id9F80C780F1E1407F9D5BA4B62092E31D"><enum>(I)</enum><header>Cross
references</header><text>Section 55(c)(3) of such Code is amended by striking
<quote>26(a), 30C(d)(2),</quote> and inserting <quote>30C(d)(2)</quote>.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idCC46F3A33A46431493BAEBACA9F0E3B3"><enum>(J)</enum><header>Foreign tax
credit</header><text>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.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idB4860E1CBCC64705B3AB80D9767C71B4"><enum>(K)</enum><header>First-time home
buyer credit for the District of Columbia</header><text>Section 1400C(d) of
such Code is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id5B4DCEA83A3840849DF57FB803105DED" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="idEEB4A96621104EE787D0ACC56BEDC791"><enum>(d)</enum><header>Carryforward of
unused credit</header><text>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.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id61C54FF3F8D44C2A8194C72D73C9FAF3"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2009.</text>
</subsection></section><enum>III</enum><header>Permanent
estate tax relief</header>
<section display-inline="no-display-inline" id="H0D7333DA3C3A4144BF4AC74BEDDB0E81" section-type="subsequent-section"><enum>301.</enum><header>Application of
estate, generation-skipping transfer, and gift taxes after 2009</header>
<subsection commented="no" id="H01F9561710824A6993D5D7674BF2785F"><enum>(a)</enum><header>In
general</header><text>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:</text>
<paragraph commented="no" id="H0C08430DD6C14DA09D14A5E038506891"><enum>(1)</enum><text>Subtitles A and E
of title V.</text>
</paragraph><paragraph commented="no" id="HA8894486B29D4AE683B3DEC94B7B8EEB"><enum>(2)</enum><text>Subsection (d),
and so much of subsection (f)(3) as relates to subsection (d), of section
511.</text>
</paragraph><paragraph commented="no" id="HC8D193A62DC14164BDCB7D16DAB73847"><enum>(3)</enum><text>Paragraph (2) of
subsection (b), and paragraph (2) of subsection (e), of section 521.</text>
</paragraph><continuation-text commented="no" continuation-text-level="subsection">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.</continuation-text></subsection><subsection id="id9241DBD354B04A3EA928F9DAF278B3FA"><enum>(b)</enum><header>Conforming
amendment</header><text>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.</text>
</subsection></section><section id="id468D10CB39ED40F797227B0357A8AE5D" section-type="subsequent-section"><enum>302.</enum><header>Treatment of unified
credit and maximum estate tax rate after 2009</header>
<subsection id="IDedcf2911887747c4b71eddc6239f8453"><enum>(a)</enum><header>Restoration of
unified credit against gift tax</header><text>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 <quote>(determined as if the applicable exclusion amount were
$1,000,000)</quote>.</text>
</subsection><subsection id="ID5E2010CB7C7643DEB0D72B9B3EFF39E9"><enum>(b)</enum><header>Exclusion
equivalent of unified credit equal to $5,000,000</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="idF795F9A3BE9543809B871227C36FAB65" style="OLC">
<subsection id="id9BDB8FBA96E14851BE9BA57B3EF92CBA"><enum>(c)</enum><header>Applicable
credit amount</header>
<paragraph id="idCD358D47EAE24DC5B4F743FD3286F4AC"><enum>(1)</enum><header>In
general</header><text>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.</text>
</paragraph><paragraph id="id0C516540DBB448E689A1468C4F513F9E"><enum>(2)</enum><header>Applicable
exclusion amount</header>
<subparagraph id="idA2D320C2FC7442C797AD1B0C6E76E25C"><enum>(A)</enum><header>In
general</header><text>For purposes of this subsection, the applicable exclusion
amount is $5,000,000.</text>
</subparagraph><subparagraph commented="no" id="ID39A3500D90F14670908A2E5D2A9C869B"><enum>(B)</enum><header>Inflation
adjustment</header><text>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—</text>
<clause commented="no" id="ID3E170C55656C44F1A6482CB18B749AEA"><enum>(i)</enum><text>such dollar
amount, multiplied by</text>
</clause><clause commented="no" id="IDE71A5C5CFDEE4EE680E207C66AA7AF9B"><enum>(ii)</enum><text>the
cost-of-living adjustment determined under section 1(f)(3) for such calendar
year by substituting <quote>calendar year 2009</quote> for <quote>calendar year
1992</quote> in subparagraph (B) thereof.</text>
</clause><continuation-text commented="no" continuation-text-level="subparagraph">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.</continuation-text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id66F97536AD9449CA81426F8A9D00E824"><enum>(c)</enum><header>Maximum estate
tax rate equal to 35 percent</header>
<paragraph id="id510FFA3735784B80A5EFA77C9DBBAFDB"><enum>(1)</enum><header>In
general</header><text>Subsection (c) of section 2001 of the Internal Revenue
Code of 1986 (relating to imposition and rate of tax) is amended—</text>
<subparagraph id="id89AF61650C9247729AB47CC48D0F1DF7"><enum>(A)</enum><text>by striking
<quote>Over $500,000</quote> and all that follows in the table contained in
paragraph (1) and insert the following:</text>
<quoted-block display-inline="no-display-inline" id="H01C264E335AD41B3BA5F14EA316A7543" style="OLC">
<table align-to-level="section" blank-lines-before="1" colsep="0" frame="none" line-rules="no-gen" rowsep="0" rule-weights="0.0.0.0.0.0" table-template-name="Generic: 2 text, even cols" table-type="">
<tgroup cols="2" grid-typeface="1.1" rowsep="0" thead-tbody-ldg-size="10.10.12"><colspec coldef="txt" colname="column1" colwidth="163pts" min-data-value="150"></colspec><colspec coldef="txt-no-ldr" colname="column2" colwidth="163pts" min-data-value="150"></colspec>
<tbody>
<row><entry align="left" colname="column1" leader-modify="force-ldr" stub-definition="txt-ldr" stub-hierarchy="1">Over
$500,000</entry><entry align="left" colname="column2" leader-modify="clr-ldr">$79,300, plus 35 percent of the excess of such amount
over $500,000.</entry>
</row>
</tbody>
</tgroup></table>
<after-quoted-block>,</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="idF4A133FA88614344B0E946B399DC3A44"><enum>(B)</enum><text>by striking
<quote>(1) <header-in-text level="paragraph" style="USC">In
general</header-in-text>.—</quote>, and</text>
</subparagraph><subparagraph id="idCA4113D69FAC4A6BA653D07704D6C61F"><enum>(C)</enum><text>by striking
paragraph (2).</text>
</subparagraph></paragraph><paragraph id="H03D1C72A643E4F2AA909224BCE51C2CC"><enum>(2)</enum><header>Conforming
amendment</header><text>Paragraphs (1) and (2) of section 2102(b) of such Code
are amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id1E00C552035E43938606874DE55D7698" style="OLC">
<paragraph id="id46AF03B01D75406DA055B63ED1C0B7F3"><enum>(1)</enum><header>In
general</header><text>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.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id3B75BB8F59EB40F091DBD7873D906439"><enum>(2)</enum><header>Residents of
possessions of the united states</header><text>In the case of a decedent who is
considered to be a <quote>nonresident not a citizen of the United
States</quote> 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.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="id9F575CD7C5D043EAB39A60DF85FC04F0"><enum>(d)</enum><header>Modifications
of estate and gift taxes to reflect differences in unified credit resulting
from different tax rates</header>
<paragraph id="idC05D0D1A76F448D68071A6EADA990622"><enum>(1)</enum><header>Estate
tax</header>
<subparagraph id="idDE15E16338A64B6E8D2C67F3E4B085DB"><enum>(A)</enum><header>In
general</header><text>Section 2001(b)(2) of the Internal Revenue Code of 1986
(relating to computation of tax) is amended by striking <quote>if the
provisions of subsection (c) (as in effect at the decedent's death)</quote> and
inserting <quote>if the modifications described in subsection
(g)</quote>.</text>
</subparagraph><subparagraph id="idD3ADED050E504224B92A04F8645E1698"><enum>(B)</enum><header>Modifications</header><text>Section
2001 of such Code is amended by adding at the end the following new
subsection:</text>
<quoted-block display-inline="no-display-inline" id="id2761613838854178AB1B60237FA3FDB3" style="OLC">
<subsection id="id2382E222DD224F999A3257C6F8E4C46F"><enum>(g)</enum><header>Modifications
to gift tax payable to reflect different tax rates</header><text>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—</text>
<paragraph id="idC04A088590004D6BB2A2EE8800BCD125"><enum>(1)</enum><text>the tax imposed
by chapter 12 with respect to such gifts, and</text>
</paragraph><paragraph id="id0B99FFECB1E0407B87C25920C7F3F72D"><enum>(2)</enum><text>the credit
allowed against such tax under section 2505, including in computing—</text>
<subparagraph id="id58A9E6183A31466393F5C4DA3F0C4E25"><enum>(A)</enum><text>the applicable
credit amount under section 2505(a)(1), and</text>
</subparagraph><subparagraph id="idE9846613D21742B09F1964040D000FC0"><enum>(B)</enum><text>the sum of the
amounts allowed as a credit for all preceding periods under section
2505(a)(2).</text>
</subparagraph><continuation-text continuation-text-level="paragraph">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.</continuation-text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="idA225C1245F214BF48E49CADF3BF96939"><enum>(2)</enum><header>Gift
tax</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="idC1894F8BF85F4C3A8438CE01294E764E" style="OLC">
<quoted-block-continuation-text quoted-block-continuation-text-level="subsection">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.</quoted-block-continuation-text><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="id555416B6381A45BE8447FAE00A161E3E"><enum>(e)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to estates
of decedents dying, generation-skipping transfers, and gifts made, after
December 31, 2009.</text>
</subsection></section><section id="H9EE3A9AC72A44C629E269BA7C4E70266"><enum>303.</enum><header>Unified credit
increased by unused unified credit of deceased spouse</header>
<subsection id="HAEFCE2837DAD4600BA51014EF5847DEC"><enum>(a)</enum><header>In
general</header><text>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:</text>
<quoted-block id="H720F388BF5A54D2388008700D6073C7C" style="OLC">
<paragraph id="HA2D7843962C047BDBD9024327BCA8D48"><enum>(2)</enum><header>Applicable
exclusion amount</header><text>For purposes of this subsection, the applicable
exclusion amount is the sum of—</text>
<subparagraph id="H34699E0D659D4FD690C5E9BE4B38F41E"><enum>(A)</enum><text>the basic
exclusion amount, and</text>
</subparagraph><subparagraph id="H946F335B9869482685CCB5002C3D8FBC"><enum>(B)</enum><text>in the case of a
surviving spouse, the aggregate deceased spousal unused exclusion
amount.</text>
</subparagraph></paragraph><paragraph display-inline="no-display-inline" id="HE3E1119D9C8E493FBA78031E71A35304"><enum>(3)</enum><header>Basic exclusion
amount</header>
<subparagraph id="HCD1364FD8C3C4411BA5636A8AA59A99E"><enum>(A)</enum><header>In
general</header><text>For purposes of this subsection, the basic exclusion
amount is $5,000,000.</text>
</subparagraph><subparagraph commented="no" id="id58D352FC74CB4F26AB4556EB46D6958D"><enum>(B)</enum><header>Inflation
adjustment</header><text>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—</text>
<clause commented="no" id="id1FD92B3650E4487189E4EFAD7214A55D"><enum>(i)</enum><text>such dollar
amount, multiplied by</text>
</clause><clause commented="no" id="idE436808BE9CB441AB3FFC018834F1804"><enum>(ii)</enum><text>the
cost-of-living adjustment determined under section 1(f)(3) for such calendar
year by substituting <quote>calendar year 2009</quote> for <quote>calendar year
1992</quote> in subparagraph (B) thereof.</text>
</clause><continuation-text commented="no" continuation-text-level="subparagraph">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.</continuation-text></subparagraph></paragraph><paragraph id="H943753DF9B9E4490AC302BC602000048"><enum>(4)</enum><header>Aggregate
deceased spousal unused exclusion amount</header><text>For purposes of this
subsection, the term <term>aggregate deceased spousal unused exclusion
amount</term> means the lesser of—</text>
<subparagraph id="HE8DAE05FF69B432C91A975027873EF11"><enum>(A)</enum><text>the basic
exclusion amount, or</text>
</subparagraph><subparagraph id="H03E0E805FA67418E879390E69244A163"><enum>(B)</enum><text>the sum of the
deceased spousal unused exclusion amounts computed with respect to each
deceased spouse of the surviving spouse.</text>
</subparagraph></paragraph><paragraph id="H221FD3760693413FAC9B1BF9C51D51EB"><enum>(5)</enum><header>Deceased spousal
unused exclusion amount</header><text>For purposes of this subsection, the term
<term>deceased spousal unused exclusion amount</term> means, with respect to
the surviving spouse of any deceased spouse dying after December 31, 2009, the
excess (if any) of—</text>
<subparagraph id="HF859E4ACCFEF455E9D54848F762E3217"><enum>(A)</enum><text>the basic
exclusion amount of the deceased spouse, over</text>
</subparagraph><subparagraph id="HEE45E24A95F44CB093AD571A2D8269"><enum>(B)</enum><text>the amount with
respect to which the tentative tax is determined under section 2001(b)(1) on
the estate of such deceased spouse.</text>
</subparagraph></paragraph><paragraph id="HF736F5B8D2314FD28B008CA4082243DA"><enum>(6)</enum><header>Special
rules</header>
<subparagraph id="H827DB1844CCE4C5882A1A3188D83BAAB"><enum>(A)</enum><header>Election
required</header><text>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.</text>
</subparagraph><subparagraph id="H096109197E9647B7AD1B10BF0639CD00"><enum>(B)</enum><header>Examination of
prior returns after expiration of period of limitations with respect to
deceased spousal unused exclusion amount</header><text>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.</text>
</subparagraph></paragraph><paragraph id="H4D51A5BA9B9B42A3AD6828EFD12975AB"><enum>(7)</enum><header>Regulations</header><text>The
Secretary shall prescribe such regulations as may be necessary or appropriate
to carry out this
subsection.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H25B385B58FDD496FB51DD3F9A66241EB"><enum>(b)</enum><header>Conforming
amendments</header>
<paragraph id="H4C3643B8087E458690714B62E7736040"><enum>(1)</enum><text>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:</text>
<quoted-block id="H2D75C53D41E74CDC9DCDBE12A1DC849" style="OLC">
<paragraph id="HEB767A7A671043D688D8469C88948193"><enum>(1)</enum><text>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</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H066475B357ED45FC8B1EB2966593F3CF"><enum>(2)</enum><text>Section 2631(c) of
such Code is amended by striking <quote>the applicable exclusion amount</quote>
and inserting <quote>the basic exclusion amount</quote>.</text>
</paragraph><paragraph id="HFE37CB509142462FA2CAAB4CA15BB46"><enum>(3)</enum><text>Section 6018(a)(1)
of such Code is amended by striking <quote>applicable exclusion amount</quote>
and inserting <quote>basic exclusion amount</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="H1B712EC271D54A7D837799E7528D25DA"><enum>(c)</enum><header>Effective
Date</header><text>The amendments made by this section shall apply to estates
of decedents dying, generation-skipping transfers, and gifts made, after
December 31, 2009.</text>
</subsection></section><section id="id6A40AABA02AA47E2A7931661207D79BE"><enum>304.</enum><header>Special
election for decedents dying in 2010</header><text display-inline="no-display-inline">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.</text>
</section>
September 14, 2010
Read the second time and placed on the
calendar