Friday, December 04, 2009
House Passes Bill to Make 2009 Estate Tax Exemption Amount Permanent
Today, the U.S. House of Representatives voted 225-200 in favor of H.R. 4154.
H.R. 4154 would make the 2009 Estate Tax Level Permanent.
The Senate has not ratified this bill yet but is considering similiar legislation.
For calendar year 2009, the estate tax exemption amount is $3.5 million ($7 million total for a married couple) and the maximum tax rate on estates is 45%. H.R. 4154, the Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009, introduced by Congressman Pomeroy, would permanently extend this estate tax exemption amount and tax rate. Absent this change, the estate tax is scheduled to enter one year of full repeal in 2010 followed by a return of the estate tax in 2011 with much lower exemption amount ($1 million) and a much higher maximum tax rate (55%).
FULL TEXT OF THE BILL FOLLOWS
111th CONGRESS
1st Session
H. R. 4154
To amend the Internal Revenue Code of 1986 to repeal the new carryover basis rules in order to prevent tax increases and the imposition of compliance burdens on many more estates than would benefit from repeal, to retain the estate tax with a $3,500,000 exemption, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
November 19, 2009
Mr. POMEROY introduced the following bill; which was referred to the Committee on Ways and Means
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A BILL
To amend the Internal Revenue Code of 1986 to repeal the new carryover basis rules in order to prevent tax increases and the imposition of compliance burdens on many more estates than would benefit from repeal, to retain the estate tax with a $3,500,000 exemption, 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.
This Act may be cited as the `Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009'.
SEC. 2. RETENTION OF ESTATE TAX; REPEAL OF CARRYOVER BASIS.
(a) In General- Subtitles A and E of title V of the Economic Growth and Tax Relief Reconciliation Act of 2001, and the amendments made by such subtitles, are hereby repealed; and the Internal Revenue Code of 1986 shall be applied as if such subtitles, and amendments, had never been enacted.
(b) Sunset Not To Apply- Section 901 of the Economic Growth and Tax Relief Reconciliation Act of 2001 shall not apply to title V of such Act.
(c) Conforming Amendments-
(1) Sections 511(d) and 521(b)(2) of the Economic Growth and Tax Relief Reconciliation Act of 2001, and the amendments made by such sections, are hereby repealed; and the Internal Revenue Code of 1986 shall be applied as if such sections, and amendments, had never been enacted.
(2) Subsection (c) of section 2511 of the Internal Revenue Code of 1986 is hereby repealed.
SEC. 3. MODIFICATIONS TO ESTATE AND GIFT TAXES.
(a) $3,500,000 Applicable Exclusion Amount- Subsection (c) of section 2010 of the Internal Revenue Code of 1986 (relating to applicable credit amount) is amended by striking all that follows `the applicable exclusion amount' and inserting `. For purposes of the preceding sentence, the applicable exclusion amount is $3,500,000.'.
(b) Freeze Maximum Estate and Gift Tax Rates at 45 Percent- Subsection (c) of section 2001 of such Code is amended--
(1) by striking paragraph (2),
(2) by striking so much of paragraph (1) as precedes the table contained therein, and
(3) by striking the last 2 items in the table and inserting the following new item:
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`Over $1,500,000 $555,800, plus 45 percent of the excess of such amount over $1,500,000.'.
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(c) Effective Date- The amendments made by this section shall apply to estates of decedents dying, and gifts made, after December 31, 2009.