HR 5315 IH
106th CONGRESS
2d Session
H. R. 5315
To amend the Internal Revenue Code of 1986 to reduce estate and gift
tax rates, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
September 27, 2000
Mr. TANNER (for himself, Mr. STENHOLM, Mr. BOYD, Ms. HOOLEY of Oregon, Mr.
SPRATT, Mr. DOOLEY of California, Ms. ESHOO, Mr. ABERCROMBIE, Mrs. MCCARTHY of
New York, Ms. LOFGREN, Mr. CROWLEY, Mr. LUCAS of Kentucky, Ms. DANNER, Mr. HALL
of Texas, Mr. SISISKY, Mr. TURNER, Mrs. TAUSCHER, Mr. SMITH of Washington, Mr.
BERRY, Mr. SHOWS, Mr. THOMPSON of California, Mr. HOLDEN, Mr. HILL of Indiana,
Mr. JOHN, Mr. CRAMER, and Mr. DOYLE) 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 estate and gift
tax rates, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
(a) SHORT TITLE- This Act may be cited as the `Death Tax Relief Now Act of
2000'.
(b) AMENDMENT OF 1986 CODE- Except as otherwise expressly provided,
whenever in this Act an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the reference shall
be considered to be made to a section or other provision of the Internal
Revenue Code of 1986.
SEC. 2. 20 PERCENT REDUCTION OF ESTATE TAX RATES.
(a) IN GENERAL- Subsection (c) of section 2001 is amended by redesignating
paragraph (2) as paragraph (3) and by striking paragraph (1) and inserting the
following new paragraphs:
`If the amount with respect to which the tentative tax is to be computed
is:
The tentative tax is:
Not over $10,000
14.4% of such amount.
Over $10,000 but not over $20,000
$1,440, plus 16% of the excess of such amount over $10,000
Over $20,000 but not over $40,000
$3,040, plus 17.6% of the excess of such amount over $20,000
Over $40,000 but not over $60,000
$6,560, plus 19.2% of the excess of such amount over $40,000
Over $60,000 but not over $80,000
$10,400, plus 20.8% of the excess of such amount over $60,000
Over $80,000 but not over $100,000
$14,560, plus 22.4% of the excess of such amount over $80,000
Over $100,000 but not over $150,000
$19,040, plus 24% of the excess of such amount over $100,000
Over $150,000 but not over $250,000
$31,040, plus 25.6% of the excess of such amount over $150,000
Over $250,000 but not over $500,000
$56,640, plus 27.2% of the excess of such amount over $250,000
Over $500,000 but not over $750,000
$124,640, plus 29.6% of the excess of such amount over $500,000
Over $750,000 but not over $1,000,000
$198,640, plus 31.2% of the excess of such amount over $750,000
Over $1,000,000 but not over $1,250,000
$276,640, plus 32.8% of the excess of such amount over $1,000,000
Over $1,250,000 but not over $1,500,000
$358,640, plus 34.4% of the excess of such amount over $1,250,000
Over $1,500,000 but not over $2,000,000
$444,640, plus 36% of the excess of such amount over $1,500,000
Over $2,000,000 but not over $2,500,000
$624,640, plus 39.2% of the excess of such amount over $2,000,000
Over $2,500,000 but not over $3,000,000
$820,640, plus 42.4% of the excess of such amount over $2,500,000
Over $3,000,000
$1,032,640, plus 44% of the excess of such amount over $3,000,000.
`(2) REDUCTION IN MAXIMUM RATE AFTER 2009- In the case of decedents
dying, and gifts made, after 2009, the following item shall be substituted
for the last 2 items in the schedule contained in paragraph (1):
Over $2,500,000
$820,640, plus 39.6% of the excess of such amount over $2,500,000.'
(b) RESTORATION OF PHASEOUT OF UNIFIED CREDIT- Paragraph (2) of section
2001(c) is amended by striking `$10,000,000' and all that follows and
inserting `$10,000,000. The amount of the increase under the preceding
sentence shall not exceed the sum of--
`(A) the applicable credit amount under section 2010(c), and
`(B) the excess of the amount equal to 44 percent of $3,000,000 over
the amount of the tentative tax under paragraph (1) on
$3,000,000.
In the case of decedents dying, and gifts made, after 2009, subparagraph
(B) shall be applied by substituting `39.6 percent' for `44 percent' and
`$2,500,000' for `$3,000,000'.'
(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. INCREASE IN EXEMPTION EQUIVALENT OF UNIFIED CREDIT; INFLATION
ADJUSTMENT OF CREDIT.
(a) IN GENERAL- The table contained in section 2010(c) (relating to
applicable credit amount) is amended to read as follows:
`In the case of estates of decedents
--The applicable
dying, and gifts made, during:
--exclusion amount is:
2001 and 2002
--$1,300,000
2003 and 2004
--$1,500,000
2005 and 2006
--$1,700,000
2007 and 2008
--$1,900,000
2009 or thereafter
--$2,000,000.'
(b) INFLATION ADJUSTMENT-
(1) IN GENERAL- Section 2010 is amended by redesignating subsection (d)
as subsection (e) and by inserting after subsection (c) the following new
subsection:
`(d) INFLATION ADJUSTMENT- In the case of any decedent dying, and gift
made, in a calendar year after 2010, the $2,000,000 amount set forth in
subsection (c) shall be increased by an amount equal to--
`(1) $2,000,000, multiplied by
`(2) the cost-of-living adjustment determined under section 1(f)(3) for
such calendar year by sub-
stituting `calendar year 2009' for `calendar year 1992' in subparagraph (B)
thereof.
If any amount as adjusted under the preceding sentence is not a multiple
of $10,000, such amount shall be rounded to the nearest multiple of
$10,000.'
(2) CONFORMING AMENDMENTS- Sections 2033A(a)(2), 6018(a)(1),
6601(j)(2)(A)(i) are each amended by striking `section 2010(c)' and
inserting `section 2010'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
estates of decedents dying, and gifts made, after December 31, 2000.
SEC. 4. REPEAL OF ESTATE TAX BENEFIT FOR FAMILY-OWNED BUSINESS
INTERESTS.
(a) IN GENERAL- Section 2057 is hereby repealed.
(b) CONFORMING AMENDMENTS-
(1) Paragraph (10) of section 2031(c) is amended by inserting `(as in
effect on the day before the date of the enactment of the Death Tax Relief
Now Act of 2000)' before the period.
(2) The table of sections for part IV of subchapter A of chapter 11 is
amended by striking the item relating to section 2057.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
estates of decedents dying, and gifts made, after December 31, 2000.
SEC. 5. CREDIT FOR STATE DEATH TAXES REPLACED WITH DEDUCTION FOR SUCH
TAXES.
(a) REPEAL OF CREDIT- Section 2011 (relating to credit for State death
taxes) is hereby repealed.
(b) DEDUCTION FOR STATE DEATH TAXES- Part IV of subchapter A of chapter 11
is amended by adding at the end the following new section:
`SEC. 2058. STATE DEATH TAXES.
`(a) ALLOWANCE OF DEDUCTION- For purposes of the tax imposed by section
2001, the value of the taxable estate shall be determined by deducting from
the value of the gross estate the amount of any estate, inheritance, legacy,
or succession taxes actually paid to any State or the District of Columbia, in
respect of any property included in the gross estate (not including any such
taxes paid with respect to the estate of a person other than the decedent).
`(b) PERIOD OF LIMITATIONS- The deduction allowed by this section shall
include only such taxes as were actually paid and deduction therefor claimed
within 4 years after the filing of the return required by section 6018, except
that--
`(1) If a petition for redetermination of a deficiency has been filed
with the Tax Court within the time prescribed in section 6213(a), then
within such 4-year period or before the expiration of 60 days after the
decision of the Tax Court becomes final.
`(2) If, under section 6161 or 6166, an extension of time has been
granted for payment of the tax shown on the return, or of a deficiency, then
within such 4-year period or before the date of the expiration of the period
of the extension.
`(3) If a claim for refund or credit of an overpayment of tax imposed by
this chapter has been filed within the time prescribed in section 6511, then
within such 4-year period or before the expiration of 60 days from the date
of mailing by certified mail or registered mail by the Secretary to the
taxpayer of a notice of the disallowance of any part of such claim, or
before the expiration of 60 days after a decision by any court of competent
jurisdiction becomes final with respect to a timely suit instituted upon
such claim, whichever is later.
Refund based on the deduction may (despite the provisions of sections 6511
and 6512) be made if claim therefor is filed within the period above provided.
Any such refund shall be made without interest.'
(c) CONFORMING AMENDMENTS-
(1) Subsection (a) of section 2012 is amended by striking `the credit
for State death taxes provided by section 2011 and'.
(2) Subparagraph (A) of section 2013(c)(1) is amended by striking
`2011,'.
(3) Paragraph (2) of section 2014(b) is amended by striking `,
2011,'.
(4) Sections 2015 and 2016 are each amended by striking `2011 or'.
(5) Subsection (d) of section 2053 is amended to read as follows:
`(d) CERTAIN FOREIGN DEATH TAXES-
`(1) IN GENERAL- Notwithstanding the provisions of subsection (c)(1)(B)
of this section, for purposes of the tax imposed by section 2001, the value
of the taxable estate may be determined, if the executor so elects before
the expiration of the period of limitation for assessment provided in
section 6501, by deducting from the value of the gross estate the amount (as
determined in accordance with regulations prescribed by the Secretary) of
any estate, succession, legacy, or inheritance tax imposed by and actually
paid to any foreign country, in respect of any property situated within such
foreign
country and included in the gross estate of a citizen or resident of the
United States, upon a transfer by the decedent for public, charitable, or
religious uses described in section 2055. The determination under this paragraph
of the country within which property is situated shall be made in accordance
with the rules applicable under subchapter B (sec. 2101 and following) in
determining whether property is situated within or without the United States.
Any election under this paragraph shall be exercised in accordance with
regulations prescribed by the Secretary.
`(2) CONDITION FOR ALLOWANCE OF DEDUCTION- No deduction shall be allowed
under paragraph (1) for a foreign death tax specified therein unless the
decrease in the tax imposed by section 2001 which results from the deduction
provided in paragraph (1) will inure solely for the benefit of the public,
charitable, or religious transferees described in section 2055 or section
2106(a)(2). In any case where the tax imposed by section 2001 is equitably
apportioned among all the transferees of property included in the gross
estate, including those described in sections 2055 and 2106(a)(2) (taking
into account any exemptions, credits, or deductions allowed by this
chapter), in determining such decrease, there shall be disregarded any
decrease in the Federal estate tax which any transferees other than those
described in sections 2055 and 2106(a)(2) are required to pay.
`(3) EFFECT ON CREDIT FOR FOREIGN DEATH TAXES OF DEDUCTION UNDER THIS
SUBSECTION-
`(A) ELECTION- An election under this subsection shall be deemed a
waiver of the right to claim a credit, against the Federal estate tax,
under a death tax convention with any foreign country for any tax or
portion thereof in respect of which a deduction is taken under this
subsection.
`See section 2014(f) for the effect of a deduction taken under this
paragraph on the credit for foreign death taxes.'
(6) Subparagraph (A) of section 2056A(b)(10) is amended--
(A) by striking `2011,', and
(B) by inserting `2058,' after `2056,'.
(7)(A) Subsection (a) of section 2102 is amended to read as
follows:
`(a) IN GENERAL- The tax imposed by section 2101 shall be credited with
the amounts determined in accordance with sections 2012 and 2013 (relating to
gift tax and tax on prior transfers).'
(B) Section 2102 is amended by striking subsection (b) and by
redesignating subsection (c) as subsection (b).
(C) Section 2102(b)(5) (as redesignated by subparagraph (B)) and section
2107(c)(3) are each amended by striking `2011 to 2013, inclusive,' and
inserting `2012 and 2013'.
(8) Subsection (a) of section 2106 is amended by adding at the end the
following new paragraph:
`(4) STATE DEATH TAXES- The amount which bears the same ratio to the
State death taxes as the value of the property, as determined for purposes
of this chapter, upon which State death taxes were paid and which is
included in the gross estate under section 2103 bears to the value of the
total gross estate under section 2103. For purposes of this paragraph, the
term `State death taxes' means the taxes described in section
2011(a).'
(9) Section 2201 is amended--
(A) by striking `as defined in section 2011(d)', and
(B) by adding at the end the following new flush sentence:
`For purposes of this section, the additional estate tax is the difference
between the tax imposed by section 2001 or 2101 and the amount equal to 125
percent of the maximum credit provided by section 2011(b), as in effect before
its repeal by the Estate Tax Relief Act of 2000.'
(10) Paragraph (2) of section 6511(i) is amended by striking `2011(c),
2014(b),' and inserting `2014(b)'.
(11) Subsection (c) of section 6612 is amended by striking `section
2011(c) (relating to refunds due to credit for State taxes),'.
(12) The table of sections for part II of subchapter A of chapter 11 is
amended by striking the item relating to section 2011.
(13) The table of sections for part IV of subchapter A of chapter 11 is
amended by adding at the end the following new item:
`Sec. 2058. State death taxes.'
(d) EFFECTIVE DATE- The amendments made by this section shall apply to
estates of decedents dying after December 31, 2000.
SEC. 6. INCREASE IN NUMBER OF ALLOWABLE PARTNERS AND SHAREHOLDERS IN CLOSELY
HELD BUSINESSES FOR PURPOSES OF EXTENSION OF TIME FOR PAYING ESTATE TAX.
(a) IN GENERAL- Paragraphs (1)(B)(ii), (1)(C)(ii), and (9)(B)(iii)(I) of
section 6166(b) of the Internal Revenue Code of 1986 (relating to definitions
and special rules) are each amended by striking `15' and inserting `45'.
(b) EFFECTIVE DATE- The amendment made by this section shall apply to
estates of decedents dying after December 31, 2000.
END