Permanent Tax Relief Act - Makes permanent: (1) the Economic Growth and Tax Relief Reconciliation Act of 2001, and (2) provisions of the Jobs and Growth Tax Relief Reconciliation Act of 2003 that reduce tax rates on dividend and capital gain income.
Amends the Internal Revenue Code to make permanent: (1) the increased alternative minimum tax (AMT) exemption amount for individual taxpayers, and (2) the offset against the AMT for certain nonrefundable personal tax credits.
Repeals the estate tax and the tax on generation-skipping transfers. Reduces the maximum gift tax rate to 35%. Allows a lifetime gift tax exemption of $5 million.
[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 3420 Placed on Calendar Senate (PCS)]
Calendar No. 472
112th CONGRESS
2d Session
S. 3420
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.
_______________________________________________________________________
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.
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 Tax Relief Act''.
SEC. 2. PERMANENT EXTENSION OF TAX RELIEF.
(a) 2001 Tax Relief.--The Economic Growth and Tax Relief
Reconciliation Act of 2001 is amended by striking title IX.
(b) 2003 Relief.--Title III of the Jobs and Growth Tax Relief
Reconciliation Act of 2003 is amended by striking section 303.
(c) Alternative Minimum Tax Exemption Amounts.--
(1) Increased exemption amounts made permanent.--
(A) In general.--Paragraph (1) of section 55(d) of
the Internal Revenue Code of 1986 is amended--
(i) 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'',
(ii) 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
(iii) by striking ``paragraph (1)(A)'' in
subparagraph (C) and inserting ``subparagraph
(A)''.
(2) 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:
``(4) Inflation adjustment.--
``(A) 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--
``(i) such dollar amount, multiplied by
``(ii) 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.
``(B) Rounding.--Any increase determined under
subparagraph (A) shall be rounded to the nearest
multiple of $100.''.
(3) Effective date.--The amendments made by this subsection
shall apply to taxable years beginning after December 31, 2011.
(d) Alternative Minimum Tax Relief for Nonrefundable Credits.--
(1) In general.--Subsection (a) of section 26 of the
Internal Revenue Code of 1986 is amended to read as follows:
``(a) 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--
``(1) the taxpayer's regular tax liability for the taxable
year reduced by the foreign tax credit allowable under section
27(a), and
``(2) the tax imposed by section 55(a) for the taxable
year.''.
(2) Conforming amendments.--
(A) Adoption credit.--
(i) Section 23(b) of the Internal Revenue
Code of 1986 is amended by striking paragraph
(4).
(ii) Section 23(c) of such Code is amended
by striking paragraphs (1) and (2) and
inserting the following:
``(1) 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.''.
(iii) Section 23(c) of such Code is amended
by redesignating paragraph (3) as paragraph
(2).
(B) Child tax credit.--
(i) Section 24(b) of such Code is amended
by striking paragraph (3).
(ii) Section 24(d)(1) of such Code is
amended--
(I) 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
(II) 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)''.
(C) Credit for interest on certain home
mortgages.--Section 25(e)(1)(C) of such Code is amended
to read as follows:
``(C) 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).''.
(D) Savers' credit.--Section 25B of such Code is
amended by striking subsection (g).
(E) Residential energy efficient property.--Section
25D(c) of such Code is amended to read as follows:
``(c) 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.''.
(F) Certain plug-in electric vehicles.--Section
30(c)(2) of such Code is amended to read as follows:
``(2) 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.''.
(G) Alternative motor vehicle credit.--Section
30B(g)(2) of such Code is amended to read as follows:
``(2) 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.''.
(H) New qualified plug-in electric vehicle
credit.--Section 30D(c)(2) of such Code is amended to
read as follows:
``(2) 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.''.
(I) Cross references.--Section 55(c)(3) of such
Code is amended by striking ``26(a), 30C(d)(2),'' and
inserting ``30C(d)(2)''.
(J) 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.
(K) First-time home buyer credit for the district
of columbia.--Section 1400C(d) of such Code is amended
to read as follows:
``(d) 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.''.
(3) Effective date.--The amendments made by this subsection
shall apply to taxable years beginning after December 31, 2011.
SEC. 3. REPEAL OF ESTATE AND GENERATION-SKIPPING TRANSFER TAXES.
(a) 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:
``SEC. 2210. TERMINATION.
``(a) 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.
``(b) 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--
``(1) section 2056A(b)(1)(A) shall not apply to
distributions made after the 10-year period beginning on such
date, and
``(2) section 2056A(b)(1)(B) shall not apply on or after
such date.''.
(b) 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:
``SEC. 2664. TERMINATION.
``This chapter shall not apply to generation-skipping transfers on
or after the date of the enactment of the Permanent Tax Relief Act.''.
(c) Conforming Amendments.--
(1) 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.''.
(2) 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.''.
(d) Restoration of Pre-EGTRRA Provisions Not Applicable.--
(1) 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.
(2) 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).
(e) Sunset Not Applicable.--Section 304 of the Tax Relief,
Unemployment Insurance Reauthorization, and Job Creation Act of 2010 is
hereby repealed.
(f) 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.
SEC. 4. MODIFICATIONS OF GIFT TAX.
(a) Computation of Gift Tax.--Subsection (a) of section 2502 of the
Internal Revenue Code of 1986 is amended to read as follows:
``(a) Computation of Tax.--
``(1) In general.--The tax imposed by section 2501 for each
calendar year shall be an amount equal to the excess of--
``(A) 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
``(B) a tentative tax, computed under paragraph
(2), on the aggregate sum of the taxable gifts for each
of the preceding calendar periods.
``(2) Rate schedule.--
``If the amount with respect to which The tentative
the tentative tax to be computed is:. 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.''.
(b) 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:
``(c) 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.''.
(c) Lifetime Gift Exemption.--Paragraph (1) of section 2505(a) of
the Internal Revenue Code of 1986 is amended to read as follows:
``(1) 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''.
(d) Conforming Amendments.--
(1) Section 2505(a) of the Internal Revenue Code of 1986 is
amended by striking the last sentence.
(2) The heading for section 2505 of such Code is amended by
striking ``unified''.
(3) 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.''.
(e) Effective Date.--The amendments made by this section shall
apply to gifts made on or after the date of the enactment of this Act.
(f) Transition Rule.--
(1) 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.
(2) 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.
Calendar No. 472
112th CONGRESS
2d Session
S. 3420
_______________________________________________________________________
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.
_______________________________________________________________________
July 24, 2012
Read the second time and placed on the calendar
Introduced in Senate
Introduced in the Senate. Read the first time. Placed on Senate Legislative Calendar under Read the First Time.
Read the second time. Placed on Senate Legislative Calendar under General Orders. Calendar No. 472.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line