1.This Act may be cited as the
Permanent Tax Relief
Act
.
2.Permanent extension of
tax relief
(a)The Economic Growth
and Tax Relief Reconciliation Act of 2001 is amended by striking title
IX.
(b)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)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 inflationSubsection (d) of section 55 of the
Internal Revenue Code of 1986 is amended by adding at the end the following new
paragraph:
(4)
(A)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)Any
increase determined under subparagraph (A) shall be rounded to the nearest
multiple of
$100.
.
(3)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)Subsection (a) of section 26 of the Internal Revenue Code
of 1986 is amended to read as follows:
(a)Limitation
based on amount of taxThe 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)
(A)
(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)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)
(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 mortgagesSection 25(e)(1)(C) of such
Code is amended to read as follows:
(C)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)Section 25B of such Code is amended by striking subsection
(g).
(E)Residential
energy efficient propertySection 25D(c) of such Code is amended
to read as follows:
(c)Carryforward of
unused creditIf 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 vehiclesSection 30(c)(2) of such Code is amended to
read as follows:
(2)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 creditSection 30B(g)(2) of such Code is amended to
read as follows:
(2)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 creditSection 30D(c)(2) of such Code is
amended to read as follows:
(2)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)Section 55(c)(3) of such Code is amended by striking
26(a), 30C(d)(2),
and inserting 30C(d)(2)
.
(J)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 ColumbiaSection 1400C(d) of
such Code is amended to read as follows:
(d)Carryforward of
unused creditIf 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)The amendments made by this subsection shall apply to
taxable years beginning after December 31, 2011.
3.Repeal of estate and
generation-skipping transfer taxes
(a)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:
2210.
(a)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 TrustsIn 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 RepealSubchapter 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:
2664.This chapter shall not apply to
generation-skipping transfers on or after the date of the enactment of the
Permanent Tax Relief
Act.
.
(c)
(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)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 basisParagraph
(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)Section 304 of the Tax Relief, Unemployment Insurance
Reauthorization, and Job Creation Act of 2010 is hereby repealed.
(f)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.
4.Modifications of
gift tax
(a)Subsection (a) of
section 2502 of the Internal Revenue Code of 1986 is amended to read as
follows:
(a)
(1)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)
If the amount with respect to which the tentative tax to be
computed is:The tentative tax
is:
Not over $10,00018% 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 TrustSection 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 TrustNotwithstanding 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)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)
(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)The amendments made by
this section shall apply to gifts made on or after the date of the enactment of
this Act.
(f)
(1)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.
July 24, 2012
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