II
Calendar No. 472
112th CONGRESS
2d Session
S. 3420
IN THE SENATE OF THE UNITED STATES
July 23, 2012
Mr. Lee (for himself, Mr. Rubio, Mr. Risch, Mr. DeMint, Mr. Cornyn, Mr. Vitter, and Mr. Johnson of Wisconsin) introduced the following bill; which was read the first time
July 24, 2012
Read the second time and placed on the calendar
A BILL
To permanently extend the 2001 and 2003 tax cuts, to provide for permanent alternative minimum tax relief, and to repeal the estate and generation-skipping transfer taxes, and for other purposes.
Short title
This Act may be cited as the
Permanent Tax Relief
Act
.
Permanent extension of tax relief
2001 tax relief
The Economic Growth and Tax Relief Reconciliation Act of 2001 is amended by striking title IX.
2003 relief
Title III of the Jobs and Growth Tax Relief Reconciliation Act of 2003 is amended by striking section 303.
Alternative minimum tax exemption amounts
Increased exemption amounts made permanent
In general
Paragraph (1) of section 55(d) of the Internal Revenue Code of 1986 is amended—
by
striking $45,000 ($72,450 in the case of taxable years beginning in 2010
and $74,450 in the case of taxable years beginning in 2011)
in
subparagraph (A) and inserting $74,450
,
by
striking $33,750 ($47,450 in the case of taxable years beginning in 2010
and $48,450 in the case of taxable years beginning in 2011)
in
subparagraph (B) and inserting $48,450
, and
by striking
paragraph (1)(A)
in subparagraph (C) and inserting
subparagraph (A)
.
Exemption amounts indexed for inflation
Subsection (d) of section 55 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
Inflation adjustment
In general
In the case of any taxable year beginning in a calendar year after 2011, each of the dollar amounts contained in subparagraphs (A) and (B) of paragraph (1) shall be increased by an amount equal to—
such dollar amount, multiplied by
the
cost-of-living adjustment determined under section 1(f)(3) for the calendar
year in which the taxable year begins, determined by substituting
calendar year 2010
for calendar year 1992
in
subparagraph (B) thereof.
Rounding
Any increase determined under subparagraph (A) shall be rounded to the nearest multiple of $100.
.
Effective date
The amendments made by this subsection shall apply to taxable years beginning after December 31, 2011.
Alternative minimum tax relief for nonrefundable credits
In general
Subsection (a) of section 26 of the Internal Revenue Code of 1986 is amended to read as follows:
Limitation based on amount of tax
The aggregate amount of credits allowed by this subpart for the taxable year shall not exceed the sum of—
the taxpayer's regular tax liability for the taxable year reduced by the foreign tax credit allowable under section 27(a), and
the tax imposed by section 55(a) for the taxable year.
.
Conforming amendments
Adoption credit
Section 23(b) of the Internal Revenue Code of 1986 is amended by striking paragraph (4).
Section 23(c) of such Code is amended by striking paragraphs (1) and (2) and inserting the following:
In general
If the credit allowable under subsection (a) for any taxable year exceeds the limitation imposed by section 26(a) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section and sections 25D and 1400C), such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such taxable year.
.
Section 23(c) of such Code is amended by redesignating paragraph (3) as paragraph (2).
Child tax credit
Section 24(b) of such Code is amended by striking paragraph (3).
Section 24(d)(1) of such Code is amended—
by striking
section 26(a)(2) or subsection (b)(3), as the case may be,
each
place it appears in subparagraphs (A) and (B) and inserting section
26(a)
, and
by striking
section 26(a)(2) or subsection (b)(3), as the case may be
in the
second last sentence and inserting section 26(a)
.
Credit for interest on certain home mortgages
Section 25(e)(1)(C) of such Code is amended to read as follows:
Applicable tax limit
For purposes of this paragraph, the term applicable
tax limit
means the limitation imposed by section 26(a) for the taxable
year reduced by the sum of the credits allowable under this subpart (other than
this section and sections 23, 25D, and
1400C).
.
Savers' credit
Section 25B of such Code is amended by striking subsection (g).
Residential energy efficient property
Section 25D(c) of such Code is amended to read as follows:
Carryforward of unused credit
If the credit allowable under subsection (a) exceeds the limitation imposed by section 26(a) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section), such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year.
.
Certain plug-in electric vehicles
Section 30(c)(2) of such Code is amended to read as follows:
Personal credit
For purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year.
.
Alternative motor vehicle credit
Section 30B(g)(2) of such Code is amended to read as follows:
Personal credit
For purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year.
.
New qualified plug-in electric vehicle credit
Section 30D(c)(2) of such Code is amended to read as follows:
Personal credit
For purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year.
.
Cross references
Section 55(c)(3) of such Code is amended by striking
26(a), 30C(d)(2),
and inserting 30C(d)(2)
.
Foreign tax credit
Section 904 of such Code is amended by striking subsection (i) and by redesignating subsections (j) , (k), and (l) as subsections (i), (j), and (k), respectively.
First-time home buyer credit for the District of Columbia
Section 1400C(d) of such Code is amended to read as follows:
Carryforward of unused credit
If the credit allowable under subsection (a) exceeds the limitation imposed by section 26(a) for such taxable year reduced by the sum of the credits allowable under subpart A of part IV of subchapter A (other than this section and section 25D), such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such taxable year.
.
Effective date
The amendments made by this subsection shall apply to taxable years beginning after December 31, 2011.
Repeal of estate and generation-skipping transfer taxes
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:
Termination
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 Permanent Tax Relief Act.
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 Permanent Tax Relief Act—
section 2056A(b)(1)(A) shall not apply to distributions made after the 10-year period beginning on such date, and
section 2056A(b)(1)(B) shall not apply on or after such date.
.
Generation-Skipping Transfer Tax Repeal
Subchapter G of chapter 13 of subtitle B of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:
Termination
This chapter shall not apply to generation-skipping transfers on or after the date of the enactment of the Permanent Tax Relief Act.
.
Conforming Amendments
The table of sections for subchapter C of chapter 11 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:
Sec. 2210. Termination.
.
The table of sections for subchapter G of chapter 13 of such Code is amended by adding at the end the following new item:
Sec. 2664. Termination.
.
Restoration of pre-EGTRRA provisions not applicable
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.
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).
Sunset not applicable
Section 304 of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 is hereby repealed.
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.
Modifications of gift tax
Computation of gift tax
Subsection (a) of section 2502 of the Internal Revenue Code of 1986 is amended to read as follows:
Computation of tax
In general
The tax imposed by section 2501 for each calendar year shall be an amount equal to the excess of—
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
a tentative tax, computed under paragraph (2), on the aggregate sum of the taxable gifts for each of the preceding calendar periods.
Rate schedule
| If the amount with respect to which the tentative tax to be computed is: | The tentative tax is: |
| Not over $10,000 | 18% 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. |
.
Treatment of Certain Transfers in Trust
Section 2511 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
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.
.
Lifetime gift exemption
Paragraph (1) of section 2505(a) of the Internal Revenue Code of 1986 is amended to read as follows:
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
.
Conforming amendments
Section 2505(a) of the Internal Revenue Code of 1986 is amended by striking the last sentence.
The heading for
section 2505 of such Code is amended by striking Unified
.
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.
.
Effective date
The amendments made by this section shall apply to gifts made on or after the date of the enactment of this Act.
Transition rule
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 title 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.
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 title is enacted shall be treated as one preceding calendar period.
July 24, 2012
Read the second time and placed on the calendar