II
Calendar No. 562
111th CONGRESS
2d Session
S. 3773
IN THE SENATE OF THE UNITED STATES
September 13, 2010
Mr. McConnell (for himself, Mr. Grassley, Mr. Kyl, Mr. McCain, Mr. Cochran, Mr. Graham, Mr. Roberts, Mr. Cornyn, Mr. Inhofe, Mr. Ensign, Mr. Isakson, Mr. Brownback, Mr. Enzi, Mr. Crapo, Mr. Burr, Mr. Vitter, Mr. Wicker, Mr. Chambliss, Mr. Bond, Mrs. Hutchison, Mr. Hatch, Mr. Bennett, Mr. Risch, and Mr. Shelby) introduced the following bill; which was read the first time
September 14, 2010
Read the second time and placed on the calendar
A BILL
To permanently extend the 2001 and 2003 tax relief provisions and to provide permanent AMT relief and estate tax relief, and for other purposes.
Short title
This Act may be cited as
the Tax Hike Prevention Act of
2010
.
Permanent tax relief
2001 tax relief made permanent
Title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 is repealed.
2003 tax relief made permanent
Section 303 of the Jobs and Growth Tax Relief Reconciliation Act of 2003 is repealed.
Technical and conforming amendments
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.
Permanent individual AMT relief
Permanent individual AMT relief
Modification of alternative minimum tax exemption amount
In general
Paragraph (1) of section 55(d) of the Internal Revenue Code of 1986 (relating to exemption amount) is amended to read as follows:
Exemption amount for taxpayers other than corporations
In the case of a taxpayer other than a corporation, the term exemption amount means—
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—
a joint return, or
a surviving spouse,
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—
is not a married individual, and
is not a surviving spouse,
50 percent of the dollar amount applicable under paragraph (1)(A) in the case of a married individual who files a separate return, and
$22,500 in the case of an estate or trust.
.
Specified exemption amounts
Section 55(d) of such Code is amended by adding at the end the following new paragraph:
Specified exemption amounts
Taxpayers described in paragraph (1)(A)
For purposes of paragraph (1))(A)—
| For taxable years beginning in— | The exemption amount is: |
| 2010 | $72,450 |
| 2011 | $74,450 |
| 2012 | $78,250 |
| 2013 | $81,450 |
| 2014 | $85,050 |
| 2015 | $88,650 |
| 2016 | $92,650 |
| 2017 | $96,550 |
| 2018 | $100,950 |
| 2019 | $105,150 |
| 2020 | $109,950. |
Taxpayers described in paragraph (1)(B)
For purposes of paragraph (1))(B)—
| For taxable years beginning in— | The exemption amount is: |
| 2010 | $47,450 |
| 2011 | $48,450 |
| 2012 | $50,350 |
| 2013 | $51,950 |
| 2014 | $53,750 |
| 2015 | $55,550 |
| 2016 | $57,550 |
| 2017 | $59,500 |
| 2018 | $61,700 |
| 2019 | $63,800 |
| 2020 | $66,200. |
.
Alternative minimum tax relief for nonrefundable credits
In general
Subsection (a) of section 26 of the Internal Revenue Code of 1986 is amended to read as follows:
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—
the taxpayer's regular tax liability for the taxable year reduced by the foreign tax credit allowable under section 27(a), and
the tax imposed by section 55(a) for the taxable year.
.
Conforming amendments
Adoption credit
Section 23(b) of such Code is amended by striking paragraph (4).
Section 23(c) of such Code is amended by striking paragraphs (1) and (2) and inserting the following:
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.
.
Section 23(c) of such Code is amended by redesignating paragraph (3) as paragraph (2).
Child tax credit
Section 24(b) of such Code is amended by striking paragraph (3).
Section 24(d)(1) of such Code is amended—
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
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)
.
Credit for interest on certain home mortgages
Section 25(e)(1)(C) of such Code is amended to read as follows:
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).
.
Savers' credit
Section 25B of such Code is amended by striking subsection (g).
Residential energy efficient property
Section 25D(c) of such Code is amended to read as follows:
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.
.
Certain plug-in electric vehicles
Section 30(c)(2) of such Code is amended to read as follows:
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.
.
Alternative motor vehicle credit
Section 30B(g)(2) of such Code is amended to read as follows:
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.
.
New qualified plug-in electric vehicle credit
Section 30D(c)(2) of such Code is amended to read as follows:
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.
.
Cross references
Section 55(c)(3) of such Code is amended by striking
26(a), 30C(d)(2),
and inserting 30C(d)(2)
.
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.
First-time home buyer credit for the District of Columbia
Section 1400C(d) of such Code is amended to read as follows:
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.
.
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2009.
Permanent estate tax relief
Application of estate, generation-skipping transfer, and gift taxes after 2009
In general
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:
Subtitles A and E of title V.
Subsection (d), and so much of subsection (f)(3) as relates to subsection (d), of section 511.
Paragraph (2) of subsection (b), and paragraph (2) of subsection (e), of section 521.
Conforming amendment
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.
Treatment of unified credit and maximum estate tax rate after 2009
Restoration of unified credit against gift tax
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 (determined as if the applicable exclusion amount were
$1,000,000)
.
Exclusion equivalent of unified credit equal to $5,000,000
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:
Applicable credit amount
In general
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.
Applicable exclusion amount
In general
For purposes of this subsection, the applicable exclusion amount is $5,000,000.
Inflation adjustment
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—
such dollar amount, multiplied by
the
cost-of-living adjustment determined under section 1(f)(3) for such calendar
year by substituting calendar year 2009
for calendar year
1992
in subparagraph (B) thereof.
.
Maximum estate tax rate equal to 35 percent
In general
Subsection (c) of section 2001 of the Internal Revenue Code of 1986 (relating to imposition and rate of tax) is amended—
by striking
Over $500,000
and all that follows in the table contained in
paragraph (1) and insert the following:
| Over $500,000 | $79,300, plus 35 percent of the excess of such amount over $500,000. |
,
by striking
(1) In
general.—
, and
by striking paragraph (2).
Conforming amendment
Paragraphs (1) and (2) of section 2102(b) of such Code are amended to read as follows:
In general
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.
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 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.
.
Modifications of estate and gift taxes to reflect differences in unified credit resulting from different tax rates
Estate tax
In general
Section 2001(b)(2) of the Internal Revenue Code of 1986
(relating to computation of tax) is amended by striking if the
provisions of subsection (c) (as in effect at the decedent's death)
and
inserting if the modifications described in subsection
(g)
.
Modifications
Section 2001 of such Code is amended by adding at the end the following new subsection:
Modifications to gift tax payable to reflect different tax rates
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—
the tax imposed by chapter 12 with respect to such gifts, and
the credit allowed against such tax under section 2505, including in computing—
the applicable credit amount under section 2505(a)(1), and
the sum of the amounts allowed as a credit for all preceding periods under section 2505(a)(2).
.
Gift tax
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:
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.
.
Effective date
The amendments made by this section shall apply to estates of decedents dying, generation-skipping transfers, and gifts made, after December 31, 2009.
Unified credit increased by unused unified credit of deceased spouse
In general
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:
Applicable exclusion amount
For purposes of this subsection, the applicable exclusion amount is the sum of—
the basic exclusion amount, and
in the case of a surviving spouse, the aggregate deceased spousal unused exclusion amount.
Basic exclusion amount
In general
For purposes of this subsection, the basic exclusion amount is $5,000,000.
Inflation adjustment
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—
such dollar amount, multiplied by
the
cost-of-living adjustment determined under section 1(f)(3) for such calendar
year by substituting calendar year 2009
for calendar year
1992
in subparagraph (B) thereof.
Aggregate deceased spousal unused exclusion amount
For purposes of this subsection, the term aggregate deceased spousal unused exclusion amount means the lesser of—
the basic exclusion amount, or
the sum of the deceased spousal unused exclusion amounts computed with respect to each deceased spouse of the surviving spouse.
Deceased spousal unused exclusion amount
For purposes of this subsection, the term deceased spousal unused exclusion amount means, with respect to the surviving spouse of any deceased spouse dying after December 31, 2009, the excess (if any) of—
the basic exclusion amount of the deceased spouse, over
the amount with respect to which the tentative tax is determined under section 2001(b)(1) on the estate of such deceased spouse.
Special rules
Election required
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.
Examination of prior returns after expiration of period of limitations with respect to deceased spousal unused exclusion amount
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.
Regulations
The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out this subsection.
.
Conforming amendments
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:
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
.
Section 2631(c) of
such Code is amended by striking the applicable exclusion amount
and inserting the basic exclusion amount
.
Section 6018(a)(1)
of such Code is amended by striking applicable exclusion amount
and inserting basic exclusion amount
.
Effective Date
The amendments made by this section shall apply to estates of decedents dying, generation-skipping transfers, and gifts made, after December 31, 2009.
Special election for decedents dying in 2010
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.
September 14, 2010
Read the second time and placed on the calendar
