Death Tax Repeal Act of 2021

II 117TH CONGRESS 1ST SESSION S. 617 To amend the Internal Revenue Code of 1986 to repeal the estate and generation-skipping transfer taxes, and for other purposes. IN THE SENATE OF THE UNITED STATES MARCH 9, 2021 Mr. THUNE (for himself, Mr. BARRASSO, Mrs. BLACKBURN, Mr. BLUNT, Mr. BOOZMAN, Mr. CORNYN, Mr. COTTON, Mr. CRAMER, Mr. CRAPO, Mr. CRUZ, Mr. DAINES, Ms. ERNST, Mrs. FISCHER, Mr. GRASSLEY, Mr. HOEVEN, Mr. INHOFE, Mr. KENNEDY, Mr. MARSHALL, Mr. MCCON- NELL, Mr. MORAN, Mr. RISCH, Mr. ROUNDS, Mr. RUBIO, Mr. SCOTT of Florida, Mr. SHELBY, and Mr. WICKER) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to repeal the estate and generation-skipping transfer taxes, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Death Tax Repeal Act 4 of 2021’’. 5 VerDate Sep 11 2014 01:38 Apr 05, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S617.IS S617 kjohnson on DSK79L0C42PROD with BILLS 2 •S 617 IS SEC. 2. REPEAL OF ESTATE AND GENERATION-SKIPPING 1 TRANSFER TAXES. 2 (a) ESTATE TAX REPEAL.—Subchapter C of chapter 3 11 of subtitle B of the Internal Revenue Code of 1986 4 is amended by adding at the end the following new section: 5 ‘‘SEC. 2210. TERMINATION. 6 ‘‘(a) IN GENERAL.—Except as provided in subsection 7 (b), this chapter shall not apply to the estates of decedents 8 dying on or after the date of the enactment of the Death 9 Tax Repeal Act of 2021. 10 ‘‘(b) CERTAIN DISTRIBUTIONS FROM QUALIFIED 11 DOMESTIC TRUSTS.—In applying section 2056A with re- 12 spect to the surviving spouse of a decedent dying before 13 the date of the enactment of the Death Tax Repeal Act 14 of 2021— 15 ‘‘(1) section 2056A(b)(1)(A) shall not apply to 16 distributions made after the 10-year period begin- 17 ning on such date, and 18 ‘‘(2) section 2056A(b)(1)(B) shall not apply on 19 or after such date.’’. 20 (b) GENERATION-SKIPPING TRANSFER TAX RE- 21 PEAL.—Subchapter G of chapter 13 of subtitle B of such 22 Code is amended by adding at the end the following new 23 section: 24 VerDate Sep 11 2014 01:38 Apr 05, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S617.IS S617 kjohnson on DSK79L0C42PROD with BILLS 3 •S 617 IS ‘‘SEC. 2664. TERMINATION. 1 ‘‘This chapter shall not apply to generation-skipping 2 transfers on or after the date of the enactment of the 3 Death Tax Repeal Act of 2021.’’. 4 (c) CONFORMING AMENDMENTS.— 5 (1) The table of sections for subchapter C of 6 chapter 11 of the Internal Revenue Code of 1986 is 7 amended by adding at the end the following new 8 item: 9 ‘‘Sec. 2210. Termination.’’. (2) The table of sections for subchapter G of 10 chapter 13 of such Code is amended by adding at 11 the end the following new item: 12 ‘‘Sec. 2664. Termination.’’. (d) EFFECTIVE DATE.—The amendments made by 13 this section shall apply to the estates of decedents dying, 14 and generation-skipping transfers, after the date of the 15 enactment of this Act. 16 SEC. 3. MODIFICATIONS OF GIFT TAX. 17 (a) COMPUTATION OF GIFT TAX.—Subsection (a) of 18 section 2502 of the Internal Revenue Code of 1986 is 19 amended to read as follows: 20 ‘‘(a) COMPUTATION OF TAX.— 21 ‘‘(1) IN GENERAL.—The tax imposed by section 22 2501 for each calendar year shall be an amount 23 equal to the excess of— 24 VerDate Sep 11 2014 01:38 Apr 05, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S617.IS S617 kjohnson on DSK79L0C42PROD with BILLS 4 •S 617 IS ‘‘(A) a tentative tax, computed under para- 1 graph (2), on the aggregate sum of the taxable 2 gifts for such calendar year and for each of the 3 preceding calendar periods, over 4 ‘‘(B) a tentative tax, computed under para- 5 graph (2), on the aggregate sum of the taxable 6 gifts for each of the preceding calendar periods. 7 ‘‘(2) RATE SCHEDULE.— 8 ‘‘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 over $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 over $500,000.’’. (b) TREATMENT OF CERTAIN TRANSFERS IN 9 TRUST.—Section 2511 of the Internal Revenue Code of 10 VerDate Sep 11 2014 01:38 Apr 05, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S617.IS S617 kjohnson on DSK79L0C42PROD with BILLS 5 •S 617 IS 1986 is amended by adding at the end the following new 1 subsection: 2 ‘‘(c) TREATMENT OF CERTAIN TRANSFERS IN 3 TRUST.—Notwithstanding any other provision of this sec- 4 tion and except as provided in regulations, a transfer in 5 trust shall be treated as a taxable gift under section 2503, 6 unless the trust is treated as wholly owned by the donor 7 or the donor’s spouse under subpart E of part I of sub- 8 chapter J of chapter 1.’’. 9 (c) LIFETIME GIFT EXEMPTION.— 10 (1) IN GENERAL.—Paragraph (1) of section 11 2505(a) of the Internal Revenue Code of 1986 is 12 amended to read as follows: 13 ‘‘(1) the amount of the tentative tax which 14 would be determined under the rate schedule set 15 forth in section 2502(a)(2) if the amount with re- 16 spect to which such tentative tax is to be computed 17 were $10,000,000, reduced by’’. 18 (2) INFLATION ADJUSTMENT.—Section 2505 of 19 such Code is amended by adding at the end the fol- 20 lowing new subsection: 21 ‘‘(d) INFLATION ADJUSTMENT.— 22 ‘‘(1) IN GENERAL.—In the case of any calendar 23 year after 2011, the dollar amount in subsection 24 (a)(1) shall be increased by an amount equal to— 25 VerDate Sep 11 2014 01:38 Apr 05, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S617.IS S617 kjohnson on DSK79L0C42PROD with BILLS 6 •S 617 IS ‘‘(A) such dollar amount, multiplied by 1 ‘‘(B) the cost-of-living adjustment deter- 2 mined under section 1(f)(3) for such calendar 3 year by substituting ‘calendar year 2010’ for 4 ‘calendar year 2016’ in subparagraph (A)(ii) 5 thereof. 6 ‘‘(2) ROUNDING.—If any amount as adjusted 7 under paragraph (1) is not a multiple of $10,000, 8 such amount shall be rounded to the nearest mul- 9 tiple of $10,000.’’. 10 (d) CONFORMING AMENDMENTS.— 11 (1) Section 2505(a) of such Code is amended 12 by striking the last sentence. 13 (2) The heading for section 2505 of such Code 14 is amended by striking ‘‘UNIFIED’’. 15 (3) The item in the table of sections for sub- 16 chapter A of chapter 12 of such Code relating to 17 section 2505 is amended to read as follows: 18 ‘‘Sec. 2505. Credit against gift tax.’’. (e) EFFECTIVE DATE.—The amendments made by 19 this section shall apply to gifts made on or after the date 20 of the enactment of this Act. 21 (f) TRANSITION RULE.— 22 (1) IN GENERAL.—For purposes of applying 23 sections 1015(d), 2502, and 2505 of the Internal 24 Revenue Code of 1986, the calendar year in which 25 VerDate Sep 11 2014 01:38 Apr 05, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S617.IS S617 kjohnson on DSK79L0C42PROD with BILLS 7 •S 617 IS this Act is enacted shall be treated as 2 separate cal- 1 endar years one of which ends on the day before the 2 date of the enactment of this Act and the other of 3 which begins on such date of enactment. 4 (2) APPLICATION OF SECTION 2504(b).—For 5 purposes of applying section 2504(b) of the Internal 6 Revenue Code of 1986, the calendar year in which 7 this Act is enacted shall be treated as one preceding 8 calendar period. 9 Æ VerDate Sep 11 2014 01:38 Apr 05, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\S617.IS S617 kjohnson on DSK79L0C42PROD with BILLS