S.Amdt. 773

1. Rewrites the text S.Amdt. 756 would insert

   Rewrites S.Amdt. 756In place of the text S.Amdt. 756 would insert

   In S.Amdt. 756 as proposed

   SEC. __[struck: _]. [struck: REPEAL OF][inserted: MODIFICATIONS TO] ESTATE[struck: ][inserted: , GIFT, ]AND [struck: GIFT ][inserted: GENERATION-SKIPPING TRANSFER ]TAXES.

   Struck: (a) In General.--Subtitle B of the Internal Revenue Code of 1986 is hereby repealed.

   Struck: (b) Effective Date.--The repeal made by paragraph (1) shall apply to the estates of decedents dying, and gifts and generation-skipping transfers made, after December 31, 2013.

   Inserted: (a) Modifications to Estate Tax.--

   Inserted: (1) Exclusion amount.--Paragraph (3) of section 2010(c) of the Internal Revenue Code of 1986 is amended to read as follows:

   Inserted: "(3) Basic exclusion amount.--For purposes of this section, the basic exclusion amount is $3,500,000.".

   Inserted: (2) Maximum estate tax rate.--The table in subsection (c) of section 2001 of such Code is amended by striking "Over $1,000,000" and all that follows and inserting the following:

   Inserted: $345,800, plus 41 percent of the excess of such amount over $1,000,000.

   Inserted: $448,300, plus 43 percent of the excess of such amount over $1,250,000.

   Inserted: $555,800, plus 45 percent of the excess of such amount over ...........

   Inserted: $1,500,000.".

   Inserted: (b) Modification to Gift Tax Exclusion Amount.--Paragraph (1) of section 2505(a) of the Internal Revenue Code of 1986 is amended to read as follows:

   Inserted: "(1) the applicable credit amount in effect under section 2010(c) for such calendar year (determined as if the basic exclusion amount in section 2010(c)(2)(A) were $1,000,000), reduced by' "'.

   Inserted: (c) Modifications of Estate and Gift Taxes to Reflect Differences in Credit Resulting From Different Exclusion Amounts.--

   Inserted: (1) Estate tax adjustment.--Section 2001 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

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   Inserted: "(h) Adjustment to Reflect Changes in Exclusion Amount.--

   Inserted: "(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.

   Inserted: "(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--

   Inserted: "(A) the applicable exclusion amount in effect for such calendar year, over

   Inserted: "(B) the applicable exclusion amount in effect at the time of the decedent's death.

   Inserted: "(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).".

   Inserted: (2) Gift tax adjustment.--Section 2502 of such Code is amended by adding at the end the following new subsection:

   Inserted: "(d) Adjustment to Reflect Changes in Exclusion Amount.--

   Inserted: "(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.

   Inserted: "(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--

   Inserted: "(A) the applicable exclusion amount for such preceding calendar period, over

   Inserted: "(B) the applicable exclusion amount for the calendar year for which the tax is being computed.

   Inserted: "(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.

   Inserted: "(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).".

   Inserted: (d) Effective Date.--The amendments made by this section shall apply to estates of decedents dying, and generation-skipping transfers and gifts made, after December 31, 2013.

   Original wording

   In lieu of the matter proposed to be inserted, insert the following:

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As printed