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H.R.4885
Rural America Prosperity Act of 2000 (Introduced in the
House)
(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--
(1) insofar as they relate to the tax imposed by chapter 11 of the
Internal Revenue Code of 1986, shall apply to estates of decedents dying
after December 31, 2000, and
(2) insofar as they relate to the tax imposed by chapter 12 of such
Code, shall apply to gifts made after December 31, 2000.
SEC. 116. DEEMED ALLOCATION OF GST EXEMPTION TO LIFETIME TRANSFERS TO
TRUSTS; RETROACTIVE ALLOCATIONS.
(a) IN GENERAL- Section 2632 of the Internal Revenue Code of 1986
(relating to special rules for allocation of GST exemption) is amended by
redesignating subsection (c) as subsection (e) and by inserting after
subsection (b) the following new subsections:
`(c) DEEMED ALLOCATION TO CERTAIN LIFETIME TRANSFERS TO GST TRUSTS-
`(1) IN GENERAL- If any individual makes an indirect skip during such
individual's lifetime, any unused portion of such individual's GST exemption
shall be allocated to the property transferred to the extent necessary to
make the inclusion ratio for such property zero. If the amount of the
indirect skip exceeds such unused portion, the entire unused portion shall
be allocated to the property transferred.
`(2) UNUSED PORTION- For purposes of paragraph (1), the unused portion
of an individual's GST exemption is that portion of such exemption which has
not previously been--
`(A) allocated by such individual,
`(B) treated as allocated under subsection (b) with respect to a
direct skip occurring during or before the calendar year in which the
indirect skip is made, or
`(C) treated as allocated under paragraph (1) with respect to a prior
indirect skip.
`(A) INDIRECT SKIP- For purposes of this subsection, the term
`indirect skip' means any transfer of property (other than a direct skip)
subject to the tax imposed
by chapter 12 made to a GST trust.
`(B) GST TRUST- The term `GST trust' means a trust that could have a
generation-skipping transfer with respect to the transferor
unless--
`(i) the trust instrument provides that more than 25 percent of the
trust corpus must be distributed to or may be withdrawn by one or more
individuals who are non-skip persons--
`(I) before the date that the individual attains age
46,
`(II) on or before one or more dates specified in the trust
instrument that will occur before the date that such individual
attains age 46, or
`(III) upon the occurrence of an event that, in accordance with
regulations prescribed by the Secretary, may reasonably be expected to
occur before the date that such individual attains age
46;
`(ii) the trust instrument provides that more than 25 percent of the
trust corpus must be distributed to or may be withdrawn by one or more
individuals who are non-skip persons and who are living on the date of
death of another person
identified in the instrument (by name or by class) who is more than 10
years older than such individuals;
`(iii) the trust instrument provides that, if one or more
individuals who are non-skip persons die on or before a date or event
described in clause (i) or (ii), more than 25 percent of the trust
corpus either must be distributed to the estate or estates of one or
more of such individuals or is subject to a general power of appointment
exercisable by one or more of such individuals;
`(iv) the trust is a trust any portion of which would be included in
the gross estate of a non-skip person (other than the transferor) if
such person died immediately after the transfer;
`(v) the trust is a charitable lead annuity trust (within the
meaning of section 2642(e)(3)(A)) or a charitable remainder annuity
trust or a charitable remainder unitrust (within the meaning of section
664(d)); or
`(vi) the trust is a trust with respect to which a deduction was
allowed under section 2522 for the amount of an interest in the form of
the right to receive annual payments of a fixed percentage of the net
fair market value of the trust property (determined yearly) and which is
required to pay principal to a non-skip person if such person is alive
when the yearly payments for which the deduction was allowed
terminate.
For purposes of this subparagraph, the value of transferred property
shall not be considered to be includible in the gross estate of a non-skip
person or subject to a right of withdrawal by reason of such person
holding a right to withdraw so much of such property as does not exceed
the amount referred to in section 2503(b) with respect to any transferor,
and it shall be assumed that powers of appointment held by non-skip
persons will not be exercised.
`(4) AUTOMATIC ALLOCATIONS TO CERTAIN GST TRUSTS- For purposes of this
subsection, an
indirect skip to which section 2642(f) applies shall be deemed to have been
made only at the close of the estate tax inclusion period. The fair market
value of such transfer shall be the fair market value of the trust property at
the close of the estate tax
inclusion period.
`(5) APPLICABILITY AND EFFECT-
`(A) IN GENERAL- An individual--
`(i) may elect to have this subsection not apply to--
`(I) an indirect skip, or
`(II) any or all transfers made by such individual to a particular
trust, and
`(ii) may elect to treat any trust as a GST trust for purposes of
this subsection with respect to any or all transfers made by such
individual to such trust.
`(i) ELECTIONS WITH RESPECT TO INDIRECT SKIPS- An election under
subparagraph (A)(i)(I) shall be deemed to be timely if filed on a timely
filed gift tax return for
the calendar year in which the transfer was made or deemed to have been
made pursuant to paragraph (4) or on such later date or dates as may be
prescribed by the Secretary.
`(ii) OTHER ELECTIONS- An election under clause (i)(II) or (ii) of
subparagraph (A) may be made on a timely filed gift tax return for the calendar year
for which the election is to become effective.
`(d) RETROACTIVE ALLOCATIONS-
`(A) a non-skip person has an interest or a future interest in a trust
to which any transfer has been made,
`(i) is a lineal descendant of a grandparent of the transferor or of
a grandparent of the transferor's spouse or former spouse,
and
`(ii) is assigned to a generation below the generation assignment of
the transferor, and
`(C) such person predeceases the transferor,
then the transferor may make an allocation of any of such transferor's
unused GST exemption to any previous transfer or transfers to the trust on a
chronological basis.
`(2) SPECIAL RULES- If the allocation under paragraph (1) by the
transferor is made on a gift tax return filed on or before the
date prescribed by section 6075(b) for gifts made within the calendar year
within which the non-skip person's death occurred--
`(A) the value of such transfer or transfers for purposes of section
2642(a) shall be determined as if such allocation had been made on a
timely filed gift tax return
for each calendar year within which each transfer was made,
`(B) such allocation shall be effective immediately before such death , and
`(C) the amount of the transferor's unused GST exemption available to
be allocated shall be determined immediately before such death .
`(3) FUTURE INTEREST- For purposes of this subsection, a person has a
future interest in a trust if the trust may permit income or corpus to be
paid to such person on a date or dates in the future.'.
(b) CONFORMING AMENDMENT- Paragraph (2) of section 2632(b) of the Internal
Revenue Code of 1986 is amended by striking `with respect to a direct skip'
and inserting `or subsection (c)(1)'.
(1) DEEMED ALLOCATION- Section 2632(c) of the Internal Revenue Code of
1986 (as added by subsection (a)), and the amendment made by subsection (b),
shall apply to transfers subject to chapter 11 or 12 made after December 31,
1999, and to estate tax
inclusion periods ending after December 31, 1999.
(2) RETROACTIVE ALLOCATIONS- Section 2632(d) of the Internal Revenue
Code of 1986 (as added by subsection (a)) shall apply to deaths of non-skip
persons occurring after December 31, 1999.
SEC. 117. SEVERING OF TRUSTS.
(a) IN GENERAL- Subsection (a) of section 2642 of the Internal Revenue
Code of 1986 (relating to inclusion ratio) is amended by adding at the end the
following new paragraph:
`(A) IN GENERAL- If a trust is severed in a qualified severance, the
trusts resulting from such severance shall be treated as separate trusts
thereafter for purposes of this chapter.
`(B) QUALIFIED SEVERANCE- For purposes of subparagraph (A)--
`(i) IN GENERAL- The term `qualified severance' means the division
of a single trust and the creation (by any means available under the
governing instrument or under local law) of two or more trusts
if--
`(I) the single trust was divided on a fractional basis,
and
`(II) the terms of the new trusts, in the aggregate, provide for
the same succession of interests of beneficiaries as are provided in
the original trust.
`(ii) TRUSTS WITH INCLUSION RATIO GREATER THAN ZERO- If a trust has
an inclusion ratio of greater than zero and less than 1, a severance is
a qualified severance only if the single trust is divided into two
trusts, one of which receives a fractional share of the total value of
all trust assets equal to the applicable fraction of the single trust
immediately before the severance. In such case, the trust receiving such
fractional share shall have an inclusion ratio of zero and the other
trust shall have an inclusion ratio of 1.
`(iii) REGULATIONS- The term `qualified severance' includes any
other severance permitted under regulations prescribed by the
Secretary.
`(C) TIMING AND MANNER OF SEVERANCES- A severance pursuant to this
paragraph may be made at any time. The Secretary shall prescribe by forms
or regulations the manner in which the qualified severance shall be
reported to the Secretary.'.
(b) EFFECTIVE DATE- The amendment made by this section shall apply to
severances after December 31, 1999.
SEC. 118. MODIFICATION OF CERTAIN VALUATION RULES.
(a) GIFTS FOR WHICH GIFT TAX
RETURN FILED OR DEEMED ALLOCATION MADE- Paragraph (1) of section 2642(b) of
the Internal Revenue Code of 1986 (relating to valuation rules, etc.) is
amended to read as follows:
`(1) GIFTS FOR WHICH GIFT TAX RETURN FILED OR DEEMED
ALLOCATION MADE- If the allocation of the GST exemption to any transfers of
property is made on a gift tax
return filed on or before the date prescribed by section 6075(b) for
such
transfer or is deemed to be made under section 2632 (b)(1) or (c)(1)--
`(A) the value of such property for purposes of subsection (a) shall
be its value as finally determined for purposes of chapter 12 (within the
meaning of section 2001(f)(2)), or, in the case of an allocation deemed to
have been made at the close of an estate tax inclusion period, its value at
the time of the close of the estate tax inclusion period, and
`(B) such allocation shall be effective on and after the date of such
transfer, or, in the case of an allocation deemed to have been made at the
close of an estate tax
inclusion period, on and after the close of such estate tax inclusion period.'.
(b) TRANSFERS AT DEATH -
Subparagraph (A) of section 2642(b)(2) of the Internal Revenue Code of 1986 is
amended to read as follows:
`(A) TRANSFERS AT DEATH
- If property is transferred as a result of the death of the transferor, the value
of such property for purposes of subsection (a) shall be its value as
finally determined for purposes of chapter 11; except that, if the
requirements prescribed by the Secretary respecting allocation of
post-death changes in value
are not met, the value of such property shall be determined as of the time
of the distribution concerned.'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
transfers subject to chapter 11 or 12 of the Internal Revenue Code of 1986
made after December 31, 1999.
SEC. 119. RELIEF PROVISIONS.
(a) IN GENERAL- Section 2642 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subsection:
`(1) RELIEF FROM LATE ELECTIONS-
`(A) IN GENERAL- The Secretary shall by regulation prescribe such
circumstances and procedures under which extensions of time will be
granted to make--
`(i) an allocation of GST exemption described in paragraph (1) or
(2) of subsection (b), and
`(ii) an election under subsection (b)(3) or (c)(5) of section
2632.
Such regulations shall include procedures for requesting comparable
relief with respect to transfers made before the date of the enactment of
this paragraph.
`(B) BASIS FOR DETERMINATIONS- In determining whether to grant relief
under this paragraph, the Secretary shall take into account all relevant
circumstances, including evidence of intent contained in the trust
instrument or instrument of transfer and such other factors as the
Secretary deems relevant. For purposes of determining whether to grant
relief under this paragraph, the time for making the allocation (or
election) shall be treated as if not expressly prescribed by
statute.
`(2) SUBSTANTIAL COMPLIANCE- An allocation of GST exemption under
section 2632 that demonstrates an intent to have the lowest possible
inclusion ratio with respect to a transfer or a trust shall be deemed to be
an allocation of so much of the transferor's unused GST exemption as
produces the lowest possible inclusion ratio. In determining whether there
has been substantial compliance, all relevant circumstances shall be taken
into account, including evidence of intent contained in the trust instrument
or instrument of transfer and such other factors as the Secretary deems
relevant.'.
(1) RELIEF FROM LATE ELECTIONS- Section 2642(g)(1) of the Internal
Revenue Code of 1986 (as added by subsection (a)) shall apply to requests
pending on, or filed after, December 31, 1999.
(2) SUBSTANTIAL COMPLIANCE- Section 2642(g)(2) of such Code (as so
added) shall apply to transfers subject to chapter 11 or 12 of the Internal
Revenue Code of 1986 made after December 31, 1999. No implication is
intended with respect to the availability of relief from late elections or
the application of a rule of substantial compliance on or before such
date.
SEC. 120. EXPANSION OF ESTATE TAX RULE FOR CONSERVATION
EASEMENTS.
(a) WHERE LAND IS LOCATED-
(1) IN GENERAL- Clause (i) of section 2031(c)(8)(A) of the Internal
Revenue Code of 1986 (defining land subject to a conservation easement) is
amended--
(A) by striking `25 miles' both places it appears and inserting `50
miles'; and
(B) striking `10 miles' and inserting `25 miles'.
(2) EFFECTIVE DATE- The amendments made by this subsection shall apply
to estates of decedents dying after December 31, 1999.
(b) CLARIFICATION OF DATE FOR DETERMINING VALUE OF LAND AND EASEMENT-
(1) IN GENERAL- Section 2031(c)(2) of the Internal Revenue Code of 1986
(defining applicable percentage) is amended by adding at the end the
following new sentence: `The values taken into account under the preceding
sentence shall be such values as of the date of the contribution referred to
in paragraph (8)(B).'.
(2) EFFECTIVE DATE- The amendment made by this subsection shall apply to
estates of decedents dying after December 31, 1997.
TITLE II--STUDY OF COSTS OF REGULATIONS ON FARMERS, RANCHERS, AND
FORESTERS
SEC. 201. DEFINITIONS.
(A) IN GENERAL- The term `regulation' means the whole or a part of an
agency statement of general or particular applicability and future effect
designed to implement, interpret, or prescribe law or policy.
(B) EXCLUSION- The term `regulation' does not include--
(i) the approval or prescription, on a case-by-case or consolidated
case basis, for the future of rates, wages, corporations, or financial
structures or reorganizations thereof, prices, facilities, appliances,
services or allowances therefor, or of valuations, costs, or accounting,
or practices bearing on activities described in this clause;
or
(ii) the granting of an application for a license, registration, or
similar authority, granting or recognizing an exemption, granting a
variance or petition for relief from a regulatory requirement, or other
action relieving a restriction or taking any action necessary to permit
new or improved applications of technology.
(2) LICENSE- The term `license' means the whole or part of an agency
permit, certificate, approval, registration, charter, membership, statutory
exemption, or other form of permission.
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