H.R. 16 (112th): Sensible Estate Tax Relief Act of 2012

112th Congress, 2011–2013. Text as of Jul 30, 2012 (Introduced).

Status & Summary | PDF | Source: GPO

I

112th CONGRESS

2d Session

H. R. 16

IN THE HOUSE OF REPRESENTATIVES

July 30, 2012

(for himself, Ms. Pelosi, Mr. Hoyer, Mr. Clyburn, Mr. Rangel, Mr. Lewis of Georgia, Mr. Neal, Mr. Larson of Connecticut, Mr. Crowley, Mr. Blumenauer, Mr. Pascrell, Mr. Van Hollen, and Mrs. Capps) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on the Budget, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To provide estate, gift, and generation-skipping transfer tax relief.

1.

Short title

This Act may be cited as the Sensible Estate Tax Relief Act of 2012.

2.

Estate, gift, and generation-skipping transfer tax relief

(a)

Temporary extension

Section 901(a)(2) of the Economic Growth and Tax Relief Reconciliation Act of 2001 is amended by striking December 31, 2012 and inserting December 31, 2013.

(b)

Modifications to estate tax

(1)

Exclusion amount

Paragraph (3) of section 2010(c) of the Internal Revenue Code of 1986 is amended to read as follows:

(3)

Basic exclusion amount

For purposes of this section, the basic exclusion amount is $3,500,000.

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(2)

Maximum estate tax rate

The table in subsection (c) of section 2001 of such Code is amended by striking Over $500,000 and all that follows and inserting the following:

Over $500,000 but not over $750,000$155,800, plus 37 percent of the excess of such amount over $500,000.
Over $750,000 but not over $1,000,000$248,300, plus 39 percent of the excess of such amount over $750,000.
Over $1,000,000 but not over $1,250,000$345,800, plus 41 percent of the excess of such amount over $1,000,000.
Over $1,250,000 but not over $1,500,000$448,300, plus 43 percent of the excess of such amount over $1,250,000.
Over $1,500,000$555,800, plus 45 percent of the excess of such amount over $1,500,000.

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(c)

Modifications of estate and gift taxes To reflect differences in credit resulting from different tax rates and exclusion amounts

(1)

Changing tax rates

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.

(2)

Decreasing exclusions

(A)

Estate tax adjustment

Section 2001 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

(h)

Adjustment To reflect changes in exclusion amount

(1)

In general

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.

(2)

Limitation

The aggregate amount of gifts made in any calendar year to which the reduction under paragraph (1) applies shall not exceed the excess of—

(A)

the applicable exclusion amount in effect for such calendar year, over

(B)

the applicable exclusion amount in effect at the time of the decedent's death.

(3)

Applicable exclusion amount

The term applicable exclusion amount 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).

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(B)

Gift tax adjustment

Section 2502 of such Code is amended by adding at the end the following new subsection:

(d)

Adjustment To reflect changes in exclusion amount

(1)

In general

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.

(2)

Limitation

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—

(A)

the applicable exclusion amount for such preceding calendar period, over

(B)

the applicable exclusion amount for the calendar year for which the tax is being computed.

(3)

Applicable preceding calendar year period

The term applicable preceding calendar year period 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.

(4)

Applicable exclusion amount

The term applicable exclusion amount 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).

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(d)

Effective date

(1)

In general

Except as otherwise provided in this subsection, the amendments made by this section shall apply to estates of decedents dying, and generation-skipping transfers and gifts made, after December 31, 2012.

(2)

Extension

The amendment made by subsection (a) shall take effect as if included in the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001.

(e)

Application of EGTRRA sunset

Section 901 of the Economic Growth and Tax Relief Reconciliation Act shall apply to the amendments made by subsection (b).

3.

Treatment for PAYGO purposes

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.