[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 3420 Placed on Calendar Senate (PCS)]

                                                       Calendar No. 472
112th CONGRESS
  2d Session
                                S. 3420

   To permanently extend the 2001 and 2003 tax cuts, to provide for 
permanent alternative minimum tax relief, and to repeal the estate and 
      generation-skipping transfer taxes, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 23, 2012

Mr. Lee (for himself, Mr. Rubio, Mr. Risch, Mr. DeMint, Mr. Cornyn, Mr. 
 Vitter, and Mr. Johnson of Wisconsin) introduced the following bill; 
                     which was read the first time

                             July 24, 2012

            Read the second time and placed on the calendar

_______________________________________________________________________

                                 A BILL


 
   To permanently extend the 2001 and 2003 tax cuts, to provide for 
permanent alternative minimum tax relief, and to repeal the estate and 
      generation-skipping transfer taxes, 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 ``Permanent Tax Relief Act''.

SEC. 2. PERMANENT EXTENSION OF TAX RELIEF.

    (a) 2001 Tax Relief.--The Economic Growth and Tax Relief 
Reconciliation Act of 2001 is amended by striking title IX.
    (b) 2003 Relief.--Title III of the Jobs and Growth Tax Relief 
Reconciliation Act of 2003 is amended by striking section 303.
    (c) Alternative Minimum Tax Exemption Amounts.--
            (1) Increased exemption amounts made permanent.--
                    (A) In general.--Paragraph (1) of section 55(d) of 
                the Internal Revenue Code of 1986 is amended--
                            (i) by striking ``$45,000 ($72,450 in the 
                        case of taxable years beginning in 2010 and 
                        $74,450 in the case of taxable years beginning 
                        in 2011)'' in subparagraph (A) and inserting 
                        ``$74,450'',
                            (ii) by striking ``$33,750 ($47,450 in the 
                        case of taxable years beginning in 2010 and 
                        $48,450 in the case of taxable years beginning 
                        in 2011)'' in subparagraph (B) and inserting 
                        ``$48,450'', and
                            (iii) by striking ``paragraph (1)(A)'' in 
                        subparagraph (C) and inserting ``subparagraph 
                        (A)''.
            (2) Exemption amounts indexed for inflation.--Subsection 
        (d) of section 55 of the Internal Revenue Code of 1986 is 
        amended by adding at the end the following new paragraph:
            ``(4) Inflation adjustment.--
                    ``(A) In general.--In the case of any taxable year 
                beginning in a calendar year after 2011, each of the 
                dollar amounts contained in subparagraphs (A) and (B) 
                of paragraph (1) 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 the 
                        calendar year in which the taxable year begins, 
                        determined by substituting `calendar year 2010' 
                        for `calendar year 1992' in subparagraph (B) 
                        thereof.
                    ``(B) Rounding.--Any increase determined under 
                subparagraph (A) shall be rounded to the nearest 
                multiple of $100.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after December 31, 2011.
    (d) 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 the Internal Revenue 
                        Code of 1986 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.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after December 31, 2011.

SEC. 3. REPEAL OF ESTATE AND GENERATION-SKIPPING TRANSFER TAXES.

    (a) Estate Tax Repeal.--Subchapter C of chapter 11 of subtitle B of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new section:

``SEC. 2210. TERMINATION.

    ``(a) In General.--Except as provided in subsection (b), this 
chapter shall not apply to the estates of decedents dying on or after 
the date of the enactment of the Permanent Tax Relief Act.
    ``(b) Certain Distributions From Qualified Domestic Trusts.--In 
applying section 2056A with respect to the surviving spouse of a 
decedent dying before the date of the enactment of the Permanent Tax 
Relief Act--
            ``(1) section 2056A(b)(1)(A) shall not apply to 
        distributions made after the 10-year period beginning on such 
        date, and
            ``(2) section 2056A(b)(1)(B) shall not apply on or after 
        such date.''.
    (b) Generation-Skipping Transfer Tax Repeal.--Subchapter G of 
chapter 13 of subtitle B of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new section:

``SEC. 2664. TERMINATION.

    ``This chapter shall not apply to generation-skipping transfers on 
or after the date of the enactment of the Permanent Tax Relief Act.''.
    (c) Conforming Amendments.--
            (1) The table of sections for subchapter C of chapter 11 of 
        the Internal Revenue Code of 1986 is amended by adding at the 
        end the following new item:

``Sec. 2210. Termination.''.
            (2) The table of sections for subchapter G of chapter 13 of 
        such Code is amended by adding at the end the following new 
        item:

``Sec. 2664. Termination.''.
    (d) Restoration of Pre-EGTRRA Provisions Not Applicable.--
            (1) In general.--Section 301 of the Tax Relief, 
        Unemployment Insurance Reauthorization, and Job Creation Act of 
        2010 shall not apply to estates of decedents dying, and 
        transfers made, on or after the date of the enactment of this 
        Act.
            (2) Exception for stepped-up basis.--Paragraph (1) shall 
        not apply to the provisions of law amended by subtitle E of 
        title V of the Economic Growth and Tax Relief Reconciliation 
        Act of 2001 (relating to carryover basis at death; other 
        changes taking effect with repeal).
    (e) Sunset Not Applicable.--Section 304 of the Tax Relief, 
Unemployment Insurance Reauthorization, and Job Creation Act of 2010 is 
hereby repealed.
    (f) Effective Date.--The amendments made by this section shall 
apply to the estates of decedents dying, and generation-skipping 
transfers, after the date of the enactment of this Act.

SEC. 4. MODIFICATIONS OF GIFT TAX.

    (a) Computation of Gift Tax.--Subsection (a) of section 2502 of the 
Internal Revenue Code of 1986 is amended to read as follows:
    ``(a) Computation of Tax.--
            ``(1) In general.--The tax imposed by section 2501 for each 
        calendar year shall be an amount equal to the excess of--
                    ``(A) a tentative tax, computed under paragraph 
                (2), on the aggregate sum of the taxable gifts for such 
                calendar year and for each of the preceding calendar 
                periods, over
                    ``(B) a tentative tax, computed under paragraph 
                (2), on the aggregate sum of the taxable gifts for each 
                of the preceding calendar periods.
            ``(2) Rate schedule.--


``If the amount with respect to which    The tentative
 the tentative tax to be computed is:.     tax is:
Not over $10,000.......................  18% of such amount.
Over $10,000 but not over $20,000......  $1,800, plus 20% of the excess
                                          over $10,000.
Over $20,000 but not over $40,000......  $3,800, plus 22% of the excess
                                          over $20,000.
Over $40,000 but not over $60,000......  $8,200, plus 24% of the excess
                                          over $40,000.
Over $60,000 but not over $80,000......  $13,000, plus 26% of the excess
                                          over $60,000.
Over $80,000 but not over $100,000.....  $18,200, plus 28% of the excess
                                          over $80,000.
Over $100,000 but not over $150,000....  $23,800, plus 30% of the excess
                                          over $100,000.
Over $150,000 but not over $250,000....  $38,800, plus 32% of the excess
                                          of $150,000.
Over $250,000 but not over $500,000....  $70,800, plus 34% of the excess
                                          over $250,000.
Over $500,000..........................  $155,800, plus 35% of the
                                          excess of $500,000.''.
 

    (b) Treatment of Certain Transfers in Trust.--Section 2511 of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new subsection:
    ``(c) Treatment of Certain Transfers in Trust.--Notwithstanding any 
other provision of this section and except as provided in regulations, 
a transfer in trust shall be treated as a taxable gift under section 
2503, unless the trust is treated as wholly owned by the donor or the 
donor's spouse under subpart E of part I of subchapter J of chapter 
1.''.
    (c) Lifetime Gift Exemption.--Paragraph (1) of section 2505(a) of 
the Internal Revenue Code of 1986 is amended to read as follows:
            ``(1) the amount of the tentative tax which would be 
        determined under the rate schedule set forth in section 
        2502(a)(2) if the amount with respect to which such tentative 
        tax is to be computed were $5,000,000, reduced by''.
    (d) Conforming Amendments.--
            (1) Section 2505(a) of the Internal Revenue Code of 1986 is 
        amended by striking the last sentence.
            (2) The heading for section 2505 of such Code is amended by 
        striking ``unified''.
            (3) The item in the table of sections for subchapter A of 
        chapter 12 of such Code relating to section 2505 is amended to 
        read as follows:

``Sec. 2505. Credit against gift tax.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to gifts made on or after the date of the enactment of this Act.
    (f) Transition Rule.--
            (1) In general.--For purposes of applying sections 1015(d), 
        2502, and 2505 of the Internal Revenue Code of 1986, the 
        calendar year in which this title is enacted shall be treated 
        as 2 separate calendar years one of which ends on the day 
        before the date of the enactment of this Act and the other of 
        which begins on such date of enactment.
            (2) Application of section 2504(b).--For purposes of 
        applying section 2504(b) of the Internal Revenue Code of 1986, 
        the calendar year in which this title is enacted shall be 
        treated as one preceding calendar period.
                                                       Calendar No. 472

112th CONGRESS

  2d Session

                                S. 3420

_______________________________________________________________________

                                 A BILL

   To permanently extend the 2001 and 2003 tax cuts, to provide for 
permanent alternative minimum tax relief, and to repeal the estate and 
      generation-skipping transfer taxes, and for other purposes.

_______________________________________________________________________

                             July 24, 2012

            Read the second time and placed on the calendar