II

106TH CONGRESS

1ST SESSION S. 1370

To amend the Internal Revenue Code of 1986 to extend the time for payment

of the estate tax on certain timber stands.

IN THE SENATE OF THE UNITED STATES

JULY 14, 1999

Mr. SHELBY 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 extend

the time for payment of the estate tax on certain timber

stands.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. EXTENSION OF TIME FOR PAYMENT OF ESTATE

4 TAX ON CERTAIN TIMBER STANDS.

5 (a) IN GENERAL.—Subchapter B of chapter 62 of the

6 Internal Revenue Code of 1986 (relating to extensions of

7 time for payment) is amended by adding at the end the

8 following:
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1 ‘‘SEC. 6168. EXTENSION OF TIME FOR PAYMENT OF ESTATE

2 TAX ON CERTAIN TIMBER STANDS.

3 ‘‘(a) IN GENERAL.—In the case of an interest in a

4 qualified timber property which is included in determining

5 the gross estate of a decedent who was (at the date of

6 his death) a citizen or resident of the United States, the

7 executor may elect to pay part or all of the tax imposed

8 by section 2001 on or before the date which is the earliest

9 of—

10 ‘‘(1) the date the property is no longer qualified

11 timber property,

12 ‘‘(2) the date the individual who inherited the

13 interest in the qualified timber property either trans14 fers the interest or dies, or

15 ‘‘(3) the date which is 25 years after the date

16 of death of the decedent.

17 ‘‘(b) LIMITATION.—The maximum amount of tax

18 which may be paid under this subsection shall be an

19 amount which bears the same ratio to the tax imposed

20 by section 2001 (reduced by the credits against such tax)

21 as—

22 ‘‘(1) the fair market value of the interest in the

23 qualified timber property, bears to

24 ‘‘(2) the adjusted gross estate of the decedent.

25 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur26 poses of this section—
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1 ‘‘(1) QUALIFIED TIMBER PROPERTY.—The term

2 ‘qualified timber property’ means trees and any real

3 property on which such trees are growing which is—

4 ‘‘(A) located in the United States, and

5 ‘‘(B) used in timber operations (as defined

6 in section 2032A(e)(13)(C)).

7 ‘‘(2) ADJUSTED GROSS ESTATE.—The term,

8 ‘adjusted gross estate’ means the value of the gross

9 estate reduced by the sum of the amounts allowable

10 as a deduction under section 2053 or 2054. Such

11 sum shall be determined on the basis of the facts

12 and circumstances in existence on the date (includ13 ing extensions) for filing the return of tax imposed

14 by section 2001 (or, if earlier, the date on which

15 such return is filed).

16 ‘‘(3) CERTAIN TRANSFERS AT DEATH OF HEIR

17 DISREGARDED.—Subsection (a)(2) shall not apply to

18 any transfer by reason of death so long as such

19 transfer is to a member of the family (within the

20 meaning of section 267(c)(4)) of the transferor in

21 such transfer.

22 ‘‘(d) ELECTION.—Any election under subsection (a)

23 shall be made not later than the time prescribed by section

24 6075(a) for filing the return of tax imposed by section

25 2001 (including extensions thereof), and shall be made in
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1 such manner as the Secretary shall by regulations pre2 scribe. If an election under subsection (a) is made, the

3 provisions of this subtitle shall apply as though the Sec4 retary were extending the time for payment of the tax.

5 ‘‘(e) TIME FOR PAYMENT OF INTEREST.—If the time

6 for payment of any amount of tax has been extended

7 under this section, interest payable under section 6601 on

8 any unpaid portion of such amount shall be paid at the

9 time of the payment of the tax.

10 ‘‘(f) SPECIAL RULE FOR CERTAIN DIRECT SKIPS.—

11 To the extent that an interest in a qualified timber prop12 erty is the subject of a direct skip (within the meaning

13 of section 2612(c)) occurring at the same time as and as

14 a result of the decedent’s death, then for purposes of this

15 section any tax imposed by section 2601 on the transfer

16 of such interest shall be treated as if it were additional

17 tax imposed by section 2001.

18 ‘‘(g) REGULATIONS.—The Secretary shall prescribe

19 such regulations as may be necessary to the application

20 of this section.

21 ‘‘(h) CROSS REFERENCES.—

22 ‘‘(1) SECURITY.—For authority of the Sec23 retary to require security in the case of an extension

24 under this section, see section 6165.
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1 ‘‘(2) LIEN.—For special lien (in lieu of bond)

2 in the case of an extension under this section, see

3 section 6324A.

4 ‘‘(3) PERIOD OF LIMITATION.—For extension of

5 the period of limitation in the case of an extension

6 under this section, see section 6503(d).

7 ‘‘(4) INTEREST.—For provisions relating to in8 terest on tax payable under this section, see sub9 section (j) of section 6601.’’.

10 (b) CONFORMING AMENDMENTS.—

11 (1) Section 163(k) of the Internal Revenue

12 Code of 1986 is amended by striking ‘‘6166’’ in the

13 heading and the text and inserting ‘‘6166 or 6168’’.

14 (2) Section 2053(c)(1)(D) of such Code is

15 amended—

16 (A) by striking ‘‘6166’’ and inserting

17 ‘‘6166 or 6168’’, and

18 (B) by striking ‘‘6166’’ in the heading and

19 inserting ‘‘6166 OR 6168’’.

20 (3) The following provisions of such Code are

21 amended by striking ‘‘or 6166’’ each place it ap22 pears and inserting ‘‘6166, or 6168’’:

23 (A) Section 2056A(b)(10)(A).

24 (B) Section 2204(a).

25 (C) Section 2204(b).
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1 (D) Section 6503(d).

2 (4) Section 2011(c)(2) of such Code is amended

3 by striking ‘‘or 6166’’ and inserting ‘‘, 6166, or

4 6168’’:

5 (5) The following provisions of such Code are

6 amended by inserting ‘‘or 6168’’ after ‘‘6166’’ each

7 place it appears:

8 (A) Section 2204(c).

9 (B) Section 6601(j) (except the second

10 sentence of paragraph (1)).

11 (C) Section 7481(d).

12 (6) Section 6161(a)(2) of such Code is

13 amended—

14 (A) in subparagraph (A), by striking ‘‘or’’

15 at the end,

16 (B) in subparagraph (B), by adding ‘‘or’’

17 at the end,

18 (C) in the matter following subparagraph

19 (B)—

20 (i) by striking ‘‘subparagraph (B)’’

21 and inserting ‘‘subparagraph (B) or (C)’’,

22 and

23 (ii) by inserting ‘‘or payment’’ after

24 ‘‘installment’’, and
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1 (D) by inserting after subparagraph (B)

2 the following:

3 ‘‘(C) any part of the payment determined

4 under section 6168,’’.

5 (7) Section 6324A of such Code is amended—

6 (A) by adding at the end the following:

7 ‘‘(f) APPLICATION OF SECTION TO DEFERRED TAX

8 UNDER SECTION 6168.—Rules similar to the rules of this

9 section shall apply to the amount of tax and interest de10 ferred under section 6168 (determined as of the date pre11 scribed by section 6151(a) for payment of the tax imposed

12 by chapter 11).’’, and

13 (B) in the title, by striking ‘‘ESTATE TAX

14 DEFERRED UNDER SECTION 6166’’ and in15 serting ‘‘DEFERRED ESTATE TAX’’.

16 (8) The table of sections for subchapter B of

17 chapter 62 of such Code is amended by adding at

18 the end the following:

‘‘Sec. 6168. Extension of time for payment of estate tax on certain timber

stands.’’.

19 (9) The item relating to section 6324A in the

20 table of sections for subchapter C of chapter 64 of

21 such Code is amended by striking ‘‘estate tax de22 ferred under section 6166’’ and inserting ‘‘deferred

23 estate tax’’.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to estates of decedents dying after

3 the date of enactment of this Act.

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