H.R. 1437 (107th): Estate Tax Relief Act of 2001

107th Congress, 2001–2002. Text as of Apr 04, 2001 (Introduced).

Status & Summary | PDF | Source: GPO

HR 1437 IH

107th CONGRESS

1st Session

H. R. 1437

To amend the Internal Revenue Code of 1986 to reduce the maximum estate and gift tax rate to 45 percent, to replace the unified credit against the estate and gift tax with a unified exemption amount, and to increase the gift exclusion amount.

IN THE HOUSE OF REPRESENTATIVES

April 4, 2001

Mr. COLLINS (for himself, Mr. NORWOOD, Mr. DEAL of Georgia, and Mr. CHAMBLISS) introduced the following bill; which was referred to the Committee on Ways and Means


A BILL

To amend the Internal Revenue Code of 1986 to reduce the maximum estate and gift tax rate to 45 percent, to replace the unified credit against the estate and gift tax with a unified exemption amount, and to increase the gift exclusion amount.

    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 ‘Estate Tax Relief Act of 2001’.

SEC. 2. MAXIMUM ESTATE AND GIFT TAX RATE REDUCED TO 45 PERCENT.

    (a) IN GENERAL- The table contained in section 2001(c)(1) of the Internal Revenue Code of 1986 is amended by striking the four highest brackets and inserting the following:

‘Over $1,500,000


$555,800, plus 45% of the excess over $1,500,000.’.

    (b) REPEAL OF PHASEOUT OF GRADUATED RATES-

      (1) IN GENERAL- Subsection (c) of section 2001 of such Code is amended by striking paragraph (2).

      (2) CONFORMING AMENDMENT- Section 2001(c) is amended by striking ‘(1) INGENERAL- ’ and moving the text 2 ems to the left.

    (c) EFFECTIVE DATE- The amendments made by this section shall apply to estates of decedents dying, and gifts made, after December 31, 2000.

SEC. 3. UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES REPLACED WITH UNIFIED EXEMPTION AMOUNT.

    (a) IN GENERAL-

      (1) ESTATE TAX- Subsection (b) of section 2001 of the Internal Revenue Code of 1986 (relating to computation of tax) is amended to read as follows:

    ‘(b) COMPUTATION OF TAX-

      ‘(1) IN GENERAL- The tax imposed by this section shall be the amount equal to the excess (if any) of--

        ‘(A) the tentative tax determined under paragraph (2), over

        ‘(B) the aggregate amount of tax which would have been payable under chapter 12 with respect to gifts made by the decedent after December 31, 1976, if the provisions of subsection (c) (as in effect at the decedent’s death) had been applicable at the time of such gifts.

      ‘(2) TENTATIVE TAX- For purposes of paragraph (1), the tentative tax determined under this paragraph is a tax computed under subsection (c) on the excess of--

        ‘(A) the sum of--

          ‘(i) the amount of the taxable estate, and

          ‘(ii) the amount of the adjusted taxable gifts, over

        ‘(B) the exemption amount.

      ‘(3) EXEMPTION AMOUNT- For purposes of paragraph (2), the term ‘exemption amount’ means $10,000,000.

      ‘(4) ADJUSTED TAXABLE GIFTS- For purposes of paragraph (2), the term ‘adjusted taxable gifts’ means the total amount of the taxable gifts (within the meaning of section 2503) made by the decedent after December 31, 1976, other than gifts which are includible in the gross estate of the decedent.’.

      (2) GIFT TAX- Subsection (a) of section 2502 of such Code (relating to computation of tax) 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 the amount equal to the excess (if any) of--

        ‘(A) the tentative tax determined under paragraph (2) for such calendar year, over

        ‘(B) the aggregate amount of tax that would have been payable under this chapter with respect to gifts made by the donor in preceding calendar periods if the tax had been computed under the provisions of section 2001(c) as in effect for such calendar year.

      ‘(2) TENTATIVE TAX- For purposes of paragraph (1), the tentative tax determined under this paragraph for a calendar year is a tax computed under section 2001(c) on the excess of--

        ‘(A) the aggregate sum of the taxable gifts for such calendar year and for each of the preceding calendar periods, over

        ‘(B) the exemption amount under section 2001(b)(3) for such calendar year.’.

    (b) REPEAL OF UNIFIED CREDITS-

      (1) Section 2010 of such Code (relating to unified credit against estate tax) is hereby repealed.

      (2) Section 2505 of such Code (relating to unified credit against gift tax) is hereby repealed.

    (c) CONFORMING AMENDMENTS-

      (1)(A) Subsection (b) of section 2011 of such Code is amended--

        (i) by striking ‘adjusted’ in the table; and

        (ii) by striking the last sentence.

      (B) Subsection (f) of section 2011 of such Code is amended by striking ‘, reduced by the amount of the unified credit provided by section 2010’.

      (2) Subsection (a) of section 2012 of such Code is amended by striking ‘and the unified credit provided by section 2010’.

      (3) Subparagraph (A) of section 2013(c)(1) of such Code is amended by striking ‘2010,’.

      (4) Paragraph (2) of section 2014(b) of such Code is amended by striking ‘2010, 2011,’ and inserting ‘2011’.

      (5) Clause (ii) of section 2056A(b)(12)(C) of such Code is amended to read as follows:

          ‘(ii) to treat any reduction in the tax imposed by paragraph (1)(A) by reason of the credit allowable under section 2010 (as in effect on the day before the date of the enactment of the Estate Tax Relief Act of 2001) or the exemption amount allowable under section 2001(b) with respect to the decedent as a credit under section 2505 (as so in effect) or exemption under section 2501 (as the case may be) allowable to such surviving spouse for purposes of determining the amount of the exemption allowable under section 2501 with respect to taxable gifts made by the surviving spouse during the year in which the spouse becomes a citizen or any subsequent year,’.

      (6)(A) Section 2057 of such Code is repealed and the table of sections for part IV of subchapter A of chapter 11 of such Code is amended by striking the item relating to section 2057.

      (B) Paragraph (10) of section 2031(c) of such Code is amended by inserting ‘(as in effect on the day before the date of the enactment of this parenthetical)’ before the period.

      (7) Subsection (b) of section 2101 of such Code is amended to read as follows:

    ‘(b) COMPUTATION OF TAX-

      ‘(1) IN GENERAL- The tax imposed by this section shall be the amount equal to the excess (if any) of--

        ‘(A) the tentative tax determined under paragraph (2), over

        ‘(B) a tentative tax computed under section 2001(c) on the amount of the adjusted taxable gifts.

      ‘(2) TENTATIVE TAX- For purposes of paragraph (1), the tentative tax determined under this paragraph is a tax computed under section 2001(c) on the excess of--

        ‘(A) the sum of--

          ‘(i) the amount of the taxable estate, and

          ‘(ii) the amount of the adjusted taxable gifts, over

        ‘(B) the exemption amount for the calendar year in which the decedent died.

      ‘(3) EXEMPTION AMOUNT-

        ‘(A) IN GENERAL- The term ‘exemption amount’ means $60,000.

        ‘(B) RESIDENTS OF POSSESSIONS OF THE UNITED STATES- In the case of a decedent who is considered to be a nonresident not a citizen of the United States under section 2209, the exemption amount under this paragraph shall be the greater of--

          ‘(i) $60,000, or

          ‘(ii) that proportion of $175,000 which the value of that part of the decedent’s gross estate which at the time of his death is situated in the United States bears to the value of his entire gross estate wherever situated.

        ‘(C) SPECIAL RULES-

          ‘(i) COORDINATION WITH TREATIES- To the extent required under any treaty obligation of the United States, the exemption amount allowed under this paragraph shall be equal to the amount which bears the same ratio to the exemption amount under section 2001(b)(3) (for the calendar year in which the decedent died) as the value of the part of the decedent’s gross estate which at the time of his death is situated in the United States bears to the value of his entire gross estate wherever situated. For purposes of the preceding sentence, property shall not be treated as situated in the United States if such property is exempt from the tax imposed by this subchapter under any treaty obligation of the United States.

          ‘(ii) COORDINATION WITH GIFT TAX EXEMPTION AND UNIFIED CREDIT- If an exemption has been allowed under section 2501 (or a credit has been allowed under section 2505 as in effect on the day before the date of the enactment of the Estate Tax Relief Act of 2001) with respect to any gift made by the decedent, each dollar amount contained in subparagraph (A) or (B) or the exemption amount applicable under clause (i) of this subparagraph (whichever applies) shall be reduced by the exemption so allowed under section 2501 (or, in the case of such a credit, by the amount of the gift for which the credit was so allowed).’.

      (8) Section 2102 of such Code is amended by striking subsection (c).

      (9)(A) Paragraph (1) of section 2107(a) of such Code is amended by striking ‘the table contained in’.

      (B) Paragraph (1) of section 2107(c) of such Code is amended to read as follows:

      ‘(1) EXEMPTION AMOUNT- For purposes of subsection (a), the exemption amount under section 2001 shall be $60,000.’

      (C) Paragraph (3) of section 2107(c) of such Code is amended by striking the second sentence.

      (D) The heading of subsection (c) of section 2107 of such Code is amended to read as follows:

    ‘(c) EXEMPTION AMOUNT AND CREDITS- ’.

      (10) Paragraph (1) of section 6018(a) of such Code is amended by striking ‘the applicable exclusion amount in effect under section 2010(c)’ and inserting ‘the exemption amount under section 2001(b)(3)’.

      (11) Subparagraph (A) of section 6601(j)(2) of such Code is amended to read as follows:

        ‘(A) the amount of the tentative tax which would be determined under the rate schedule set forth in section 2001(c) if the amount with respect to which such tentative tax is to be computed were $1,000,000, or’.

      (12) The table of sections for part II of subchapter A of chapter 11 of such Code is amended by striking the item relating to section 2010.

      (13) The table of sections for subchapter A of chapter 12 of such Code is amended by striking the item relating to section 2505.

    (d) EFFECTIVE DATE- The amendments made by this section shall apply to estates of decedents dying and gifts made after December 31, 2000.

SEC. 4. INCREASE IN ANNUAL GIFT EXCLUSION AMOUNT.

    (a) IN GENERAL- Paragraph (1) of section 2503(b) of the Internal Revenue Code of 1986 (relating to general exclusion from gifts) is amended by striking ‘$10,000’ and inserting ‘$50,000’.

    (b) INFLATION ADJUSTMENT- Paragraph (2) of section 2503(b) of such Code is amended--

      (1) by striking ‘$10,000’ both places it appears and inserting ‘$50,000’,

      (2) by striking ‘1998’ and inserting ‘2001’, and

      (3) by striking ‘1997’ and inserting ‘2000’.

    (c) CONFORMING AMENDMENT- Section 2523(i)(2) of such Code is amended by striking ‘$10,000’ and inserting ‘$50,000’.

    (d) EFFECTIVE DATE- The amendments made by this section shall apply to estates of decedents dying and gifts made after December 31, 2000.