S. 2242 (112th): Death Tax Repeal Permanency Act of 2012

112th Congress, 2011–2013. Text as of Mar 28, 2012 (Introduced).

Status & Summary | PDF | Source: GPO

II

112th CONGRESS

2d Session

S. 2242

IN THE SENATE OF THE UNITED STATES

March 28, 2012

(for himself, Mr. Rubio, Mr. Boozman, Mr. Lugar, Mr. Vitter, Mr. Isakson, Mr. Kyl, Mr. Heller, Mr. Moran, Mr. Roberts, Mr. Inhofe, Mr. Enzi, Mr. Grassley, Mr. Lee, Mr. Paul, Mr. Blunt, Mr. McCain, Mr. Barrasso, Mr. Cornyn, Mr. McConnell, Mr. Crapo, Mr. Hoeven, Mr. Kirk, Mr. Wicker, Mrs. Hutchison, Mr. Cochran, Mr. Burr, Mr. Sessions, Mr. Toomey, Ms. Ayotte, Mr. Risch, Mr. Coburn, Mr. Johanns, Mr. DeMint, and Mr. Coats) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to repeal the estate and generation-skipping transfer taxes, and for other purposes.

1.

Short title

This Act may be cited as the Death Tax Repeal Permanency Act of 2012.

2.

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:

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 Death Tax Repeal Permanency Act of 2012.

(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 Death Tax Repeal Permanency Act of 2012

(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 such Code is amended by adding at the end the following new section:

2664.

Termination

This chapter shall not apply to generation-skipping transfers on or after the date of the enactment of the Death Tax Repeal Permanency Act of 2012.

.

(c)

Conforming Amendments

(1)

The table of sections for subchapter C of chapter 11 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 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

(1)

Section 901 of the Economic Growth and Tax Relief Reconciliation Act of 2001 shall not apply to title V of such Act in the case of estates of decedents dying, and transfers made, on or after the date of the enactment of this Act.

(2)

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.

3.

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 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 Trust

Section 2511 (relating to transfers in general) 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 such Code 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 Act 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 Act is enacted shall be treated as one preceding calendar period.