1.
(a)This Act may be cited
as the Middle Class Tax Cut
Act
.
(b)Except as otherwise
expressly provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or other provision of the
Internal Revenue Code of 1986.
(c)The table of contents of this Act is as follows:
Sec. 1. Short title;
etc.
TITLE I—Temporary extension of tax relief
Sec. 101. Temporary extension of 2001 tax relief.
Sec. 102. Temporary extension of 2003 tax relief.
Sec. 103. Temporary extension of 2010 tax relief.
Sec. 104. Temporary extension of election to expense certain
depreciable business assets.
TITLE II—Estate tax relief
Sec. 201. Modifications to estate, gift, and
generation-skipping transfer taxes.
TITLE III—Alternative minimum tax relief
Sec. 301. Temporary extension of increased alternative minimum
tax exemption amount.
Sec. 302. Temporary extension of alternative minimum tax relief
for nonrefundable personal credits.
TITLE IV—Budgetary effects
Sec. 401. Budgetary effects.
<enum>I</enum><header>Temporary
extension of tax relief</header>
<section id="idB662486A55484CE0B08E6115EA9DFE78"><enum>101.</enum><header>Temporary
extension of 2001 tax relief</header>
<subsection id="id36D592627FDC4E68BEB4B9E4233756B1"><enum>(a)</enum><header>Temporary
extension</header>
<paragraph id="id3F545528F3204C8EB0FECD752D6BADF4"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 901 of the
Economic Growth and Tax Relief Reconciliation Act of 2001 is amended by
striking <quote>December 31, 2012</quote> both places it appears and inserting
<quote>December 31, 2013</quote>.</text>
</paragraph><paragraph id="idDB85C8BE737C4F459CCE0477C3DC2093"><enum>(2)</enum><header>Effective
date</header><text>The amendment made by this subsection shall take effect as
if included in the enactment of the Economic Growth and Tax Relief
Reconciliation Act of 2001.</text>
</paragraph></subsection><subsection id="idCFD454276A804173911E3ADB50A4685C"><enum>(b)</enum><header>Application to
certain high-Income taxpayers</header>
<paragraph id="id7C25F2135CB44CC9883C50D1A2FC22C9"><enum>(1)</enum><header>Income tax
rates</header>
<subparagraph id="id3C32739C03D246A1818F48D81CBF2F94"><enum>(A)</enum><header>Treatment of
25- and 28-percent rate brackets</header><text display-inline="yes-display-inline">Paragraph (2) of section 1(i) is amended to
read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id3E2B3F79D15F4437AADB4814E88ED9B6" style="OLC">
<paragraph id="id76EF39BF78E64A81B3A0216F19F06200"><enum>(2)</enum><header><enum-in-header>25-</enum-in-header>
and 28-percent rate brackets</header><text display-inline="yes-display-inline">The tables under subsections (a), (b), (c),
(d), and (e) shall be applied—</text>
<subparagraph id="idDEFE4C9CCAA244CA8F2E981E36BBB9DB"><enum>(A)</enum><text>by substituting
<quote>25%</quote> for <quote>28%</quote> each place it appears (before the
application of subparagraph (B)), and</text>
</subparagraph><subparagraph id="id8CCD8FCA67024966BB583C245A1AAF69"><enum>(B)</enum><text>by substituting
<quote>28%</quote> for <quote>31%</quote> each place it
appears.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="id9D81B5A6EEBC4F00A05ED5B5F3A337EF"><enum>(B)</enum><header>33-percent rate
bracket</header><text>Subsection (i) of section 1 is amended by redesignating
paragraph (3) as paragraph (4) and by inserting after paragraph (2) the
following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id13520BB09225420A8C15AA7C80CCA10C" style="OLC">
<paragraph id="id80985E62490B449DA8C07CF3404BCB0D"><enum>(3)</enum><header>33-percent rate
bracket</header>
<subparagraph id="id7068264F1A7642539A79394904599F33"><enum>(A)</enum><header>In
general</header><text>In the case of taxable years beginning after December 31,
2012—</text>
<clause id="id6C8F52E6CCBB4CBB890A9036F9C72FE8"><enum>(i)</enum><text display-inline="yes-display-inline">the rate of tax under subsections (a), (b),
(c), and (d) on a taxpayer's taxable income in the fourth rate bracket shall be
33 percent to the extent such income does not exceed an amount equal to the
excess of—</text>
<subclause id="id8379E95979B74BF29A17804946B0EFC6"><enum>(I)</enum><text display-inline="yes-display-inline">the applicable amount, over</text>
</subclause><subclause id="idBA4EF1ADE2CF42BC8F1AF695253D3565"><enum>(II)</enum><text display-inline="yes-display-inline">the dollar amount at which such bracket
begins, and</text>
</subclause></clause><clause id="id337D0E4F0B04410C8434409D023F3417"><enum>(ii)</enum><text>the 36 percent
rate of tax under such subsections shall apply only to the taxpayer's taxable
income in such bracket in excess of the amount to which clause (i)
applies.</text>
</clause></subparagraph><subparagraph id="id5CF462EFDF614D5C94456882B94EF702"><enum>(B)</enum><header>Applicable
amount</header><text>For purposes of this paragraph, the term <quote>applicable
amount</quote> means the excess of—</text>
<clause id="id4124746AE6A64731BF424259D20E9407"><enum>(i)</enum><text>the applicable
threshold, over</text>
</clause><clause id="id2E4D7B416A0E47DCA79CE8CE39BBD9B6"><enum>(ii)</enum><text>the sum of the
following amounts in effect for the taxable year:</text>
<subclause id="id62835C9D46084808944EDAEACBE18158"><enum>(I)</enum><text>the basic
standard deduction (within the meaning of section 63(c)(2)), and</text>
</subclause><subclause id="id7071F0D3464B4103B399DBDDE9AB33F9"><enum>(II)</enum><text>the exemption
amount (within the meaning of section 151(d)(1) (or, in the case of subsection
(a), 2 such exemption amounts).</text>
</subclause></clause></subparagraph><subparagraph id="id536400643514493B89DD0D5CD8105CF3"><enum>(C)</enum><header>Applicable
threshold</header><text>For purposes of this paragraph, the term
<quote>applicable threshold</quote> means—</text>
<clause id="id6C968CADAAB3474CA555A61F0F64B298"><enum>(i)</enum><text>$250,000 in the
case of subsection (a),</text>
</clause><clause commented="no" id="id8B900DC55A3242B69EF6FE58D308C1A2"><enum>(ii)</enum><text>$225,000 in the
case of subsection (b),</text>
</clause><clause id="idD68F9BE571B64C79A5F01BF3ED350304"><enum>(iii)</enum><text>$200,000 in the
case of subsections (c), and</text>
</clause><clause id="idF71833535BF44300A365A37ADCB97FAD"><enum>(iv)</enum><text><fraction>1/2</fraction>
the amount applicable under clause (i) (after adjustment, if any, under
subparagraph (E)) in the case of subsection (d).</text>
</clause></subparagraph><subparagraph id="id24C8169030094C5390A27C8F46313145"><enum>(D)</enum><header>Fourth rate
bracket</header><text>For purposes of this paragraph, the term <term>fourth
rate bracket</term> means the bracket which would (determined without regard to
this paragraph) be the 36-percent rate bracket.</text>
</subparagraph><subparagraph id="id4A8ED94B1D344BAF9F9EDD53B3578DA5"><enum>(E)</enum><header>Inflation
adjustment</header><text>For purposes of this paragraph, with respect to
taxable years beginning in calendar years after 2012, each of the dollar
amounts under clauses (i), (ii), and (iii) of subparagraph (C) shall be
adjusted in the same manner as under paragraph (1)(C), except that subsection
(f)(3)(B) shall be applied by substituting <quote>2008</quote> for
<quote>1992</quote>.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="idAED69E2EA64947898FF1E59C331602EF"><enum>(2)</enum><header>Phaseout of
personal exemptions and itemized deductions</header>
<subparagraph display-inline="no-display-inline" id="id67F3DA8C53174B47BA213E3464069BBD"><enum>(A)</enum><header>Overall
limitation on itemized deductions</header><text display-inline="yes-display-inline">Section 68 is amended—</text>
<clause id="idC18BD7A7C2354D27930B4852839941BA"><enum>(i)</enum><text>by
striking <quote>the applicable amount</quote> the first place it appears in
subsection (a) and inserting <quote>the applicable threshold in effect under
section 1(i)(3)</quote>,</text>
</clause><clause id="id589CBAAE0B4D469AA9C45E0716745AC5"><enum>(ii)</enum><text>by
striking <quote>the applicable amount</quote> in subsection (a)(1) and
inserting <quote>such applicable threshold</quote>,</text>
</clause><clause id="idB97C5673CFE24ED08EE00FF9D154B63C"><enum>(iii)</enum><text>by striking
subsection (b) and redesignating subsections (c), (d), and (e) as subsections
(b), (c), and (d), respectively, and</text>
</clause><clause id="id5AFA9F171061471B9C554250B496EDC2"><enum>(iv)</enum><text>by
striking subsections (f) and (g).</text>
</clause></subparagraph><subparagraph display-inline="no-display-inline" id="id1A3781D7E9DA4FE0B1C2ED23C480DC8C"><enum>(B)</enum><header>Phaseout of
deductions for personal exemptions</header>
<clause id="id07C4F8AF6EFE4B52A388FA82513E83B3"><enum>(i)</enum><header>In
general</header><text>Paragraph (3) of section 151(d) is amended—</text>
<subclause id="idEB31695C45A545D4816D73A885D9E392"><enum>(I)</enum><text>by striking
<quote>the threshold amount</quote> in subparagraphs (A) and (B) and inserting
<quote>the applicable threshold in effect under section 1(i)(3)</quote>,</text>
</subclause><subclause id="id19C09816F4FF47EEA09B36284229AE2E"><enum>(II)</enum><text>by striking
subparagraph (C) and redesignating subparagraph (D) as subparagraph (C),
and</text>
</subclause><subclause id="id54C5845CFFD74284BBACD17CD5813B37"><enum>(III)</enum><text>by striking
subparagraphs (E) and (F).</text>
</subclause></clause><clause id="idC1C9F8388BE14D8FBE95B742BEF0972F"><enum>(ii)</enum><header>Conforming
amendments</header><text>Paragraph (4) of section 151(d) is amended—</text>
<subclause id="idD739E2E353974B69986DA8030D0AFB85"><enum>(I)</enum><text>by striking
subparagraph (B),</text>
</subclause><subclause id="id2FCD515ED47A4172BF6397716B3DD94C"><enum>(II)</enum><text>by redesignating
clauses (i) and (ii) of subparagraph (A) as subparagraphs (A) and (B),
respectively, and by indenting such subparagraphs (as so redesignated)
accordingly, and</text>
</subclause><subclause id="idB03A3A92EC2149719610D0F3466CAF62"><enum>(III)</enum><text>by striking all
that precedes <quote>in a calendar year after 1989,</quote> and inserting the
following:</text>
<quoted-block display-inline="no-display-inline" id="id94B50C9D3F194D0692393E3EBF8CA745" style="OLC">
<paragraph id="idE5D7E7C611754E4695BBD3EBAE68C158"><enum>(4)</enum><header>Inflation
adjustment</header><text display-inline="yes-display-inline">In the case of any
taxable year
beginning</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subclause></clause></subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id932D35D043194D159153C6199F0505C0"><enum>(c)</enum><header>Effective
date</header><text>Except as otherwise provided, the amendments made by this
section shall apply to taxable years beginning after December 31, 2012.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id3CDBFE7015E44CCD822D26DB0AE83F49"><enum>(d)</enum><header>Application of
EGTRRA sunset</header><text>Each amendment made by subsection (b) shall be
subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of
2001 to the same extent and in the same manner as if such amendment was
included in title I of such Act.</text>
</subsection></section><section id="id61F921B5F6EB4EED9F87EE15F20F6F4F"><enum>102.</enum><header>Temporary
extension of 2003 tax relief</header>
<subsection id="id4A73E54CCB9C4465840450D2B0BFA0C2"><enum>(a)</enum><header>Extension</header>
<paragraph id="id159D4FA5369E4DBE92D220318CAF114B"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 303 of the
Jobs and Growth Tax Relief Reconciliation Act of 2003 is amended by striking
<quote>December 31, 2012</quote> and inserting <quote>December 31,
2013</quote>.</text>
</paragraph><paragraph id="idCC4DD5A809D94AF78C0526FF44093C79"><enum>(2)</enum><header>Effective
date</header><text>The amendment made by this subsection shall take effect as
if included in the enactment of the Jobs and Growth Tax Relief Reconciliation
Act of 2003.</text>
</paragraph></subsection><subsection id="idF59E3BA7352A4AF0866650CFC6308102"><enum>(b)</enum><header>20-Percent
capital gains rate for certain high income individuals</header>
<paragraph id="id119C8664063F43BEA3E64AF1EC2DA9FA"><enum>(1)</enum><header>In
general</header><text>Paragraph (1) of section 1(h) is amended by striking
subparagraph (C), by redesignating subparagraphs (D) and (E) as subparagraphs
(E) and (F) and by inserting after subparagraph (B) the following new
subparagraphs:</text>
<quoted-block display-inline="no-display-inline" id="id30FBBD65D9354019A0E47E834667567C" style="OLC">
<subparagraph id="id0C11B5CC05564517A337D5C573F81A33"><enum>(C)</enum><text display-inline="yes-display-inline">15 percent of the lesser of—</text>
<clause id="id656C14837C7B4325A4B14B2B846C169D"><enum>(i)</enum><text>so much of the
adjusted net capital gain (or, if less, taxable income) as exceeds the amount
on which a tax is determined under subparagraph (B), or</text>
</clause><clause id="idD4BC7104109941AB86357CAB93ECDD4B"><enum>(ii)</enum><text>the excess (if
any) of—</text>
<subclause id="id79F9B84E3D9149F38748BFC7953210D6"><enum>(I)</enum><text>the amount of
taxable income which would (without regard to this paragraph) be taxed at a
rate below 36 percent, over</text>
</subclause><subclause id="idA17B0C08746C4B4F870700A963E3D70E"><enum>(II)</enum><text>the sum of the
amounts on which a tax is determined under subparagraphs (A) and (B),</text>
</subclause></clause></subparagraph><subparagraph id="idBA2FCFF8FB7046138F7B4F5493299677"><enum>(D)</enum><text display-inline="yes-display-inline">20 percent of the adjusted net capital gain
(or, if less, taxable income) in excess of the sum of the amounts on which tax
is determined under subparagraphs (B) and
(C),</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" id="id1601DBE558634623944235927AA724CB"><enum>(2)</enum><header>Minimum
tax</header><text>Paragraph (3) of section 55(b) is amended by striking
subparagraph (C), by redesignating subparagraph (D) as subparagraph (E), and by
inserting after subparagraph (B) the following new subparagraphs:</text>
<quoted-block display-inline="no-display-inline" id="id4ED5F8C3013546838C55C5B8787A4689" style="OLC">
<subparagraph commented="no" id="id36A31EEB95FC40D2AFF796FC722E62C0"><enum>(C)</enum><text display-inline="yes-display-inline">15 percent of the lesser of—</text>
<clause commented="no" id="id2CC2EC7B3B8F4FCE866A046E5683D379"><enum>(i)</enum><text>so much of the
adjusted net capital gain (or, if less, taxable excess) as exceeds the amount
on which tax is determined under subparagraph (B), or</text>
</clause><clause commented="no" id="idFBDC8FCDBDA2425D84E74CEC5F73E078"><enum>(ii)</enum><text>the excess
described in section 1(h)(1)(C)(ii), plus</text>
</clause></subparagraph><subparagraph commented="no" id="idC2E9AF9223F944F184406B320CF50873"><enum>(D)</enum><text display-inline="yes-display-inline">20 percent of the adjusted net capital gain
(or, if less, taxable excess) in excess of the sum of the amounts on which tax
is determined under subparagraphs (B) and (C),
plus</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="id0746615B9EF548BEAE42372656907211"><enum>(c)</enum><header>Conforming
amendments</header>
<paragraph id="id687d9840f65244e1a90962d31e5eaae0"><enum>(1)</enum><text>The following
provisions are each amended by striking <quote>15 percent</quote> and inserting
<quote>20 percent</quote>:</text>
<subparagraph id="idb37e7637090a49219110501649d66f84"><enum>(A)</enum><text>Section
531.</text>
</subparagraph><subparagraph id="iddf4bc99c80d34c4d89506d893fd6dd4f"><enum>(B)</enum><text>Section
541.</text>
</subparagraph><subparagraph id="id499904369e184c858c15fcad3fafaed8"><enum>(C)</enum><text>Section
1445(e)(1).</text>
</subparagraph><subparagraph id="id7c20d24ca47e4d79aabb4d4e94135c80"><enum>(D)</enum><text>The second
sentence of section 7518(g)(6)(A).</text>
</subparagraph><subparagraph id="id84b23225ab9049ae9cd9808ef3c4ff88"><enum>(E)</enum><text>Section
53511(f)(2) of title 46, United States Code.</text>
</subparagraph></paragraph><paragraph id="idFF0792286BE642AE933F2779925A6BED"><enum>(2)</enum><text>Sections
1(h)(1)(B) and 55(b)(3)(B) are each amended by striking <quote>5 percent (0
percent in the case of taxable years beginning after 2007)</quote> and
inserting <quote>0 percent</quote>.</text>
</paragraph><paragraph id="id9368450AA6A349C3AF3E9BD5D8D3120E"><enum>(3)</enum><text display-inline="yes-display-inline">Section 1445(e)(6) is amended by striking
<quote>15 percent (20 percent in the case of taxable years beginning after
December 31, 2010)</quote> and inserting <quote>20 percent</quote>.</text>
</paragraph></subsection><subsection id="id6D30425540524A789FF9B04B559E2A78"><enum>(d)</enum><header>Effective
dates</header>
<paragraph id="id727E67136BDB443ABACB0E12BD6DE525"><enum>(1)</enum><header>In
general</header><text>Except as otherwise provided, the amendments made by
subsections (b) and (c) shall apply to taxable years beginning after December
31, 2012.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id02D07BF6B1E245ED96A5EC4E09D0BFA0"><enum>(2)</enum><header>Withholding</header><text>The
amendments made by paragraphs (1)(C) and (3) of subsection (c) shall apply to
amounts paid on or after January 1, 2013.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id6B6D6B4EF63D4C7D95A1222FECACE3B5"><enum>(e)</enum><header>Application of
JGTRRA sunset</header><text>Each amendment made by subsections (b) and (c)
shall be subject to section 303 of the Jobs and Growth Tax Relief
Reconciliation Act of 2003 to the same extent and in the same manner as if such
amendment was included in title III of such Act.</text>
</subsection></section><section id="id4B1369A02291478CA31EBF0497F5F2AC"><enum>103.</enum><header>Temporary
extension of 2010 tax relief</header>
<subsection id="id2DDCF731789547E8BDB7BDF35016E18F"><enum>(a)</enum><header>American
Opportunity Tax Credit</header>
<paragraph id="id3CA17F9838414C4F9026B67F7525EE8B"><enum>(1)</enum><header>In
general</header><text>Section 25A(i) is amended by striking <quote>or
2012</quote> and inserting <quote>2012, or 2013</quote>.</text>
</paragraph><paragraph id="id1AB744F425C24C32A8B6E1F4041CED64"><enum>(2)</enum><header>Treatment of
possessions</header><text>Section 1004(c)(1) of division B of the American
Recovery and Reinvestment Tax Act of 2009 is amended by striking <quote>and
2012</quote> each place it appears and inserting <quote>2012, and
2013</quote>.</text>
</paragraph></subsection><subsection id="idE1CEB76319A3433A9BE12FD8B092A32B"><enum>(b)</enum><header>Child tax
credit</header><text>Section 24(d)(4) is amended—</text>
<paragraph id="id419128A61CE549BEA9E5209E0317BA3E"><enum>(1)</enum><text>by striking
<quote><header-in-text level="paragraph" style="OLC">and</header-in-text>
2012</quote> in the heading and inserting <quote>2012,<header-in-text level="paragraph" style="OLC"> and</header-in-text> 2013</quote>, and</text>
</paragraph><paragraph id="idCCBE61B373474A65A7BE3902D239D836"><enum>(2)</enum><text>by striking
<quote>or 2012</quote> and inserting <quote>2012, or 2013</quote>.</text>
</paragraph></subsection><subsection id="id4EAFE6E6F21C47628EDC01CAB97987C7"><enum>(c)</enum><header>Earned income
tax credit</header><text>Section 32(b)(3) is amended—</text>
<paragraph id="id2B3787E4B4E94003AB7B977562696642"><enum>(1)</enum><text>by striking
<quote><header-in-text level="paragraph" style="OLC">and</header-in-text>
2012</quote> in the heading and inserting <quote>2012,<header-in-text level="paragraph" style="OLC"> and</header-in-text> 2013</quote>, and</text>
</paragraph><paragraph id="idCCFD2F8ABB0747379195CB8290080587"><enum>(2)</enum><text>by striking
<quote>or 2012</quote> and inserting <quote>2012, or 2013</quote>.</text>
</paragraph></subsection><subsection id="idB633A7F8B94343B0A3724D730EE10994"><enum>(d)</enum><header>Temporary
extension of rule disregarding refunds in the administration of Federal
programs and Federally assisted programs</header><text>Subsection (b) of
section 6409 is amended by striking <quote>December 31, 2012</quote> and
inserting <quote>December 31, 2013</quote>.</text>
</subsection><subsection id="id0EFD368329C44291A51E7BAAE6D4E5FA"><enum>(e)</enum><header>Effective
dates</header>
<paragraph id="idFE87CD81D4EB49A991DD54BFF7E6DBCD"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), the amendments made
by this section shall apply to taxable years beginning after December 31,
2012.</text>
</paragraph><paragraph id="id69172FA639954F64AAE883E221E71699"><enum>(2)</enum><header>Rule
disregarding refunds in the administration of certain
programs</header><text>The amendment made by subsection (d) shall apply to
amounts received after December 31, 2012.</text>
</paragraph></subsection></section><section id="id2D00D3B852A74AA59C51FD69D1CA48C3"><enum>104.</enum><header>Temporary
extension of election to expense certain depreciable business assets</header>
<subsection id="id1984E2F68E3049C8A1341FE82A907301"><enum>(a)</enum><header>In
general</header>
<paragraph id="idB6F54EFC90864DEC97145FDABDF603EA"><enum>(1)</enum><header>Dollar
limitation</header><text>Section 179(b)(1) is amended—</text>
<subparagraph id="idE44A103088224E45A8357CA6D7163A1C"><enum>(A)</enum><text>by striking
<quote>and</quote> at the end of subparagraph (C),</text>
</subparagraph><subparagraph id="idF01522EB9FE340B892102D4291EDD237"><enum>(B)</enum><text>by redesignating
subparagraph (D) as subparagraph (E),</text>
</subparagraph><subparagraph id="id1817CDD228C94AB8816A5E3D9930BCA9"><enum>(C)</enum><text>by inserting
after subparagraph (C) the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="idE6E2EF67D1754EEC849D4A40561D6290" style="OLC">
<subparagraph id="id5566BB798E9047A5A120B349DB99AD49"><enum>(D)</enum><text>$250,000 in the
case of taxable years beginning in 2013,
and</text>
</subparagraph><after-quoted-block>,
and</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="id9D3C69FCDC944F97929BA64B8966B2C8"><enum>(D)</enum><text>in subparagraph
(E), as so redesignated, by striking <quote>2012</quote> and inserting
<quote>2013</quote>.</text>
</subparagraph></paragraph><paragraph id="id184AA307101B4BD8A6187E33F51DC1EB"><enum>(2)</enum><header>Reduction in
limitation</header><text>Section 179(b)(2) is amended—</text>
<subparagraph id="idD33A3C5596F0458FBED2AC47A2AE3A67"><enum>(A)</enum><text>by striking
<quote>and</quote> at the end of subparagraph (C),</text>
</subparagraph><subparagraph id="idBA03064B9D7A4DBDB843ACF33CE03ED9"><enum>(B)</enum><text>by redesignating
subparagraph (D) as subparagraph (E),</text>
</subparagraph><subparagraph id="id850C99F8B7574FAF99172CFFF9ABDE80"><enum>(C)</enum><text>by inserting
after subparagraph (C) the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="id06EBFE68DE964675ACAF13FD64AB7E21" style="OLC">
<subparagraph id="idC4994345E55D4D1D85B1EFFA8D576FAB"><enum>(D)</enum><text>$800,000 in the
case of taxable years beginning in 2013,
and</text>
</subparagraph><after-quoted-block>,
and</after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idB110EB35AF2D466896EC3377414E2FC2"><enum>(D)</enum><text>in subparagraph
(E), as so redesignated, by striking <quote>2012</quote> and inserting
<quote>2013</quote>.</text>
</subparagraph></paragraph></subsection><subsection id="idA2923FC914214062B3152258D42AEE6C"><enum>(b)</enum><header>Computer
software</header><text>Section 179(d)(1)(A)(ii) is amended by striking
<quote>2013</quote> and inserting <quote>2014</quote>.</text>
</subsection><subsection id="idA4061141549C49C595F0EE0CC02F7B20"><enum>(c)</enum><header>Election</header><text>Section
179(c)(2) is amended by striking <quote>2013</quote> and inserting
<quote>2014</quote>.</text>
</subsection><subsection id="id2C78E3463276463C9353A992AE3A9150"><enum>(d)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2012.</text>
</subsection></section><enum>II</enum><header>Estate tax
relief</header>
<section id="id7C85B0CC6F2D4DAFA8AECE7913B88C78"><enum>201.</enum><header>Modifications
to estate, gift, and generation-skipping transfer taxes</header>
<subsection id="idA9ECC23D0AF04C05B80678EEDDFC4570"><enum>(a)</enum><header>Modifications
to estate tax</header>
<paragraph id="id92D2F51EDF9E4D12A4A19C4BE9C77970"><enum>(1)</enum><header>Exclusion
amount</header><text>Paragraph (3) of section 2010(c) is amended to read as
follows:</text>
<quoted-block display-inline="no-display-inline" id="id382498342A534D38BEE1072192B62FDE" style="OLC">
<paragraph id="idEFC684EAD73B4BBF8369AA61C8F72845"><enum>(3)</enum><header>Basic exclusion
amount</header><text>For purposes of this section, the basic exclusion amount
is $3,500,000.</text>
</paragraph><after-quoted-block>.
</after-quoted-block></quoted-block>
</paragraph><paragraph id="id523057A726C74DACA674EC2F7F1AE39E"><enum>(2)</enum><header>Maximum estate
tax rate</header><text>The table in subsection (c) of section 2001 is amended
by striking <quote>Over $500,000</quote> and all that follows and inserting the
following:</text>
<quoted-block display-inline="no-display-inline" id="idD75E4AFAC9914A9DAAD4BBF9CD20191F" style="OLC">
<table align-to-level="section" blank-lines-before="1" colsep="0" frame="none" line-rules="no-gen" rowsep="0" rule-weights="0.0.0.0.0.4" table-template-name="Tax Rate" table-type="Leaderwork, Tax">
<tgroup cols="2" rowsep="0"><colspec coldef="txt" colname="column1" colwidth="162pts" min-data-value="140"></colspec><colspec coldef="txt" colname="column2" colsep="0" colwidth="162pts" min-data-value="140"></colspec>
<tbody>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr">Over $500,000 but not over $750,000</entry><entry align="right" colname="column2" rowsep="0">$155,800, plus 37 percent of the
excess of such amount over $500,000.</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr">Over $750,000 but not over $1,000,000</entry><entry align="right" colname="column2" rowsep="0">$248,300, plus 39 percent of the
excess of such amount over $750,000.</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr">Over $1,000,000 but not over $1,250,000</entry><entry align="right" colname="column2" rowsep="0">$345,800, plus 41 percent of the
excess of such amount over $1,000,000.</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr">Over $1,250,000 but not over $1,500,000</entry><entry align="right" colname="column2" rowsep="0">$448,300, plus 43 percent of the
excess of such amount over $1,250,000.</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr">Over $1,500,000</entry><entry align="right" colname="column2" rowsep="0">$555,800, plus 45 percent of the excess of such
amount over $1,500,000.</entry>
</row>
</tbody>
</tgroup></table>
<after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" id="id9359e5d26fb74a1bb25a7adada6bd319"><enum>(b)</enum><header>Modifications
of estate and gift taxes To reflect differences in credit resulting from
different tax rates and exclusion amounts</header>
<paragraph commented="no" id="id0d7ee048f3a444abbc5f16e072055614"><enum>(1)</enum><header>Changing tax
rates</header><text>Notwithstanding section 304 of the Tax Relief, Unemployment
Insurance Reauthorization, and Job Creation Act of 2010, section 901 of the
Economic Growth and Tax Relief Reconciliation Act of 2001 shall not apply to
the amendments made by section 302(d) of the Tax Relief, Unemployment Insurance
Reauthorization, and Job Creation Act of 2010.</text>
</paragraph><paragraph commented="no" id="idef1714e81a044790a62375cc43a1cd52"><enum>(2)</enum><header>Decreasing
exclusions</header>
<subparagraph commented="no" id="id2D08416E38D6459AA9F6070FB8BD3A53"><enum>(A)</enum><header>Estate tax
adjustment</header><text>Section 2001 is amended by adding at the end the
following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="id0B1A0973D8434720AA035960DEB4B2AA" style="OLC">
<subsection commented="no" id="id8FE9DFC085124C069A7088D44D9CA008"><enum>(h)</enum><header>Adjustment To
reflect changes in exclusion amount</header>
<paragraph commented="no" id="idC7C919765E4246249838925BBB9A77CC"><enum>(1)</enum><header>In
general</header><text>If, with respect to any gift to which subsection (b)(2)
applies, the applicable exclusion amount in effect at the time of the
decedent’s death is less than such amount in effect at the time such gift is
made by the decedent, the amount of tax computed under subsection (b) shall be
reduced by the amount of tax which would have been payable under chapter 12 at
the time of the gift if the applicable exclusion amount in effect at such time
had been the applicable exclusion amount in effect at the time of the
decedent's death and the modifications described in subsection (g) had been
applicable at the time of such gifts.</text>
</paragraph><paragraph commented="no" id="id76921DF402654653B0B99813776CF047"><enum>(2)</enum><header>Limitation</header><text>The
aggregate amount of gifts made in any calendar year to which the reduction
under paragraph (1) applies shall not exceed the excess of—</text>
<subparagraph commented="no" id="id6489037C6CCF47C2A18776A7C1EF82CE"><enum>(A)</enum><text>the applicable
exclusion amount in effect for such calendar year, over</text>
</subparagraph><subparagraph commented="no" id="idBDAB0C5898B744988913FFCA85FFE40D"><enum>(B)</enum><text>the applicable
exclusion amount in effect at the time of the decedent's death.</text>
</subparagraph></paragraph><paragraph commented="no" id="id53B6D8A59F764783816F3978AD4CC69E"><enum>(3)</enum><header>Applicable
exclusion amount</header><text>The term <term>applicable exclusion
amount</term> means, with respect to any period, the amount determined under
section 2010(c) for such period, except that in the case of any period for
which such amount includes the deceased spousal unused exclusion amount (as
defined in section 2010(c)(4)), such term shall mean the basic exclusion amount
(as defined under section 2010(c)(3), as in effect for such
period).</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" id="idC31E7DB7CC3E4E3782C9D35EEDBA89F9"><enum>(B)</enum><header>Gift tax
adjustment</header><text>Section 2502 is amended by adding at the end the
following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="id0E3CA378F93648E4A3D5A960420EF5AF" style="OLC">
<subsection commented="no" id="id5FF9F9EE107148CAAE7BC2CF22FFF965"><enum>(d)</enum><header>Adjustment To
reflect changes in exclusion amount</header>
<paragraph commented="no" id="id647E17E9CA7E457C89F20B9341111139"><enum>(1)</enum><header>In
general</header><text>If the taxpayer made a taxable gift in an applicable
preceding calendar period, the amount of tax computed under subsection (a)
shall be reduced by the amount of tax which would have been payable under
chapter 12 for such applicable preceding calendar period if the applicable
exclusion amount in effect for such preceding calendar period had been the
applicable exclusion amount in effect for the calendar year for which the tax
is being computed and the modifications described in subsection (g) had been
applicable for such preceding calendar period.</text>
</paragraph><paragraph commented="no" id="id7DACE0D42B5D4C4AB658C240342B6947"><enum>(2)</enum><header>Limitation</header><text>The
aggregate amount of gifts made in any applicable preceding calendar period to
which the reduction under paragraph (1) applies shall not exceed the excess
of—</text>
<subparagraph commented="no" id="id160D47EF30884536BCA05617719ABE99"><enum>(A)</enum><text>the applicable
exclusion amount for such preceding calendar period, over</text>
</subparagraph><subparagraph commented="no" id="idB54B8391991345E6942E1C9ABA92FCFB"><enum>(B)</enum><text>the applicable
exclusion amount for the calendar year for which the tax is being
computed.</text>
</subparagraph></paragraph><paragraph commented="no" id="idB0539F2D89E4467BBE7F4A452662FDDF"><enum>(3)</enum><header>Applicable
preceding calendar year period</header><text>The term <term>applicable
preceding calendar year period</term> means any preceding calendar year period
in which the applicable exclusion amount exceeded the applicable exclusion
amount for the calendar year for which the tax is being computed.</text>
</paragraph><paragraph commented="no" id="id8EDDC374E8CE482AAB03717F63A3466C"><enum>(4)</enum><header>Applicable
exclusion amount</header><text>The term <term>applicable exclusion
amount</term> means, with respect to any period, the amount determined under
section 2010(c) for such period, except that in the case of any period for
which such amount includes the deceased spousal unused exclusion amount (as
defined in section 2010(c)(4)), such term shall mean the basic exclusion amount
(as defined under section 2010(c)(3), as in effect for such
period).</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection id="idd3c73151278043638bac706db63e6e8f"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to estates
of decedents dying, and generation-skipping transfers and gifts made, after
December 31, 2012.</text>
</subsection><subsection id="idB2A64CD13F6C41C6B6A4E7C70ADF21D1"><enum>(d)</enum><header>Application of
EGTRRA sunset</header><text>Section 901 of the Economic Growth and Tax Relief
Reconciliation Act shall apply to the amendments made by subsection (a).</text>
</subsection></section><enum>III</enum><header>Alternative
minimum tax relief</header>
<section display-inline="no-display-inline" id="id236037A6A4654F0985F24B27E353249E"><enum>301.</enum><header>Temporary
extension of increased alternative minimum tax exemption amount</header>
<subsection id="id7EA17923A1BA40D89B3FB2AA3EF7B5C1"><enum>(a)</enum><header>In
general</header><text>Paragraph (1) of section 55(d) is amended—</text>
<paragraph id="HAF91B01B4DE6433EBDDE6CD6E82FEBC7"><enum>(1)</enum><text>by striking
<quote>$72,450</quote> and all that follows through <quote>2011</quote> in
subparagraph (A) and inserting <quote>$78,750 in the case of taxable years
beginning in 2012</quote>, and</text>
</paragraph><paragraph id="id7DB682A5102D4871A6B7DD204BAC519D"><enum>(2)</enum><text>by striking
<quote>$47,450</quote> and all that follows through <quote>2011</quote> in
subparagraph (B) and inserting <quote>$50,600 in the case of taxable years
beginning in 2012</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id0C9DB097D6FF4A3786DF6C57E5840FA4"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2011.</text>
</subsection></section><section id="id31804E85AB234608876C0D7392EA746D"><enum>302.</enum><header>Temporary
extension of alternative minimum tax relief for nonrefundable personal
credits</header>
<subsection id="id9DE539AA6AF74E9C8F4D4E9A9215B11F"><enum>(a)</enum><header>In
general</header><text>Paragraph (2) of section 26(a) is amended—</text>
<paragraph id="id51619AD1FFDB4722A1DA235800511F23"><enum>(1)</enum><text>by striking
<quote>or 2011</quote> and inserting <quote>2011, or 2012</quote>, and</text>
</paragraph><paragraph id="id9033BFC177C746D09D9EB364C89285C8"><enum>(2)</enum><text>by striking
<quote><header-in-text level="paragraph" style="OLC">2011</header-in-text></quote> in the heading thereof and inserting
<quote><header-in-text level="paragraph" style="OLC">2012</header-in-text></quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id21E280511FE74D2F9CB27381FBB94714"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2011.</text>
</subsection></section><enum>IV</enum><header>Budgetary
effects</header>
<section id="idcea7f3dbaf8d4bc8825e1785b7d94c51"><enum>401.</enum><header>Budgetary
effects</header>
<subsection id="idb64449648b804cf998aea1cee8f94b22"><enum>(a)</enum><header>PAYGO
Scorecard</header><text>The budgetary effects of this Act shall not be entered
on either PAYGO scorecard maintained pursuant to section 4(d) of the Statutory
Pay-As-You-Go Act of 2010.</text>
</subsection><subsection id="id5532a08edea5401ba68dc6d7e4c7f65e"><enum>(b)</enum><header>Senate PAYGO
Scorecard</header><text>The budgetary effects of this Act shall not be entered
on any PAYGO scorecard maintained for purposes of section 201 of S. Con. Res.
21 (110th Congress).</text>
</subsection></section>
July 18, 2012
Read the second time and placed on the
calendar