I 

108TH CONGRESS 

1ST SESSION H. R. 2502

To amend the Internal Revenue Code of 1986 to reduce estate and gift 

tax rates, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 18, 2003

Mr. BEREUTER introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL

To amend the Internal Revenue Code of 1986 to reduce 

estate and gift tax rates, and for other purposes.

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Estate Tax Relief Act 

5 of 2003’’. 

6 SEC. 2. REDUCTION OF ESTATE TAX RATES. 

7 (a) IN GENERAL.—Section 2001 of the Internal Rev8 enue Code of 1986 (relating to estate tax) is amended by 

9 striking subsections (b) and (c) and by inserting after sub10 section (a) the following new subsections: 
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1 ‘‘(b) COMPUTATION OF TAX.—The tax imposed by 

2 this section shall be applicable percentage of the amount 

3 equal to the excess (if any) of—

4 ‘‘(1) the sum of—

5 ‘‘(A) the amount of the taxable estate, and 

6 ‘‘(B) the amount of the adjusted taxable 

7 gifts, over 

8 ‘‘(2) the aggregate amount of tax paid under 

9 chapter 12 with respect to gifts made by the dece10 dent after December 31, 1976. 

11 For purposes of the preceding sentence, the term ‘applica12 ble percentage’ means the highest rate of tax applicable 

13 under section 1 for a taxable year beginning in the cal14 endar year in which the decedent dies (or, for purposes 

15 of section 2502, the gift is made). 

16 ‘‘(c) ADJUSTED TAXABLE GIFTS.—For purposes of 

17 paragraph (1)(B), the term ‘adjusted taxable gifts’ means 

18 the total amount of the taxable gifts (within the meaning 

19 of section 2503) made by the decedent after December 31, 

20 1976, other than gifts which are includible in the gross 

21 estate of the decedent.’’. 

22 (b) CONFORMING AMENDMENTS.—

23 (1) Section 2010(c) of such Code is amended by 

24 striking ‘‘the rate schedule set forth in section 

25 2001(c)’’ and inserting ‘‘section 2001’’. 
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1 (2) Subsection (b) of section 2101 of such Code 

2 is amended to read as follows: 

3 ‘‘(b) COMPUTATION OF TAX.—The tax imposed by 

4 this section shall be the amount equal to the excess (if 

5 any) of—

6 ‘‘(1) a tax computed under section 2001 on the 

7 sum of—

8 ‘‘(A) the amount of the taxable estate, and 

9 ‘‘(B) the amount of the adjusted taxable 

10 gifts, over 

11 ‘‘(2) the aggregate amount of tax paid under 

12 chapter 12 with respect to gifts made by the dece13 dent after December 31, 1976.’’. 

14 (3) Section 2502 of such Code is amended to 

15 read as follows: 

16 ‘‘SEC. 2502. RATE OF TAX. 

17 ‘‘(a) GENERAL RULE.—The tax imposed by section 

18 2501 for each calendar year shall be an amount equal to—

19 ‘‘(1) the tax computed under section 2001 on 

20 the sum of the taxable gifts for such calendar year, 

21 over 

22 ‘‘(2) the tax computed under section 2001 on 

23 the sum of the taxable gifts for each of the pre24 ceding calendar periods. 
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1 ‘‘(b) TAX TO BE PAID BY DONOR.—The tax imposed 

2 by section 2501 shall be paid by the donor.’’. 

3 (4) Section 6601(j)(2)(A)(i) of such Code is 

4 amended by striking ‘‘the rate schedule set forth in 

5 section 2001(c)’’ and inserting ‘‘section 2001’’. 

6 (c) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to estates of decedents dying, and 

8 gifts made, after the date of the enactment of this Act. 

9 SEC. 3. UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES 

10 INCREASED TO EXCLUSION EQUIVALENT OF 

11 $10,000,000; INFLATION ADJUSTMENT OF 

12 CREDIT. 

13 (a) IN GENERAL.—Subsection (c) of section 2010 of 

14 the Internal Revenue Code of 1986 (relating to applicable 

15 credit amount) is amended to read as follows: 

16 ‘‘(c) APPLICABLE CREDIT AMOUNT.—For purposes 

17 of this section, the applicable credit amount is the amount 

18 of tax which would be determined under section 2001 if 

19 the amount with respect to which such tax is to be com20 puted were the applicable exclusion amount. For purposes 

21 of the preceding sentence, the applicable exclusion amount 

22 is $10,000,000.’’. 

23 (b) INFLATION ADJUSTMENT.—

24 (1) IN GENERAL.—Section 2010 of such Code 

25 is amended by redesignating subsection (d) as sub-
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1 section (e) and by inserting after subsection (c) the 

2 following new subsection: 

3 ‘‘(d) INFLATION ADJUSTMENT.—In the case of any 

4 decedent dying, and gift made, in a calendar year after 

5 2003, the $10,000,000 amount set forth in subsection (c) 

6 shall be increased by an amount equal to—

7 ‘‘(1) $10,000,000, multiplied by 

8 ‘‘(2) the cost-of-living adjustment determined 

9 under section 1(f)(3) for such calendar year by sub10 stituting ‘calendar year 2002’ for ‘calendar year 

11 1992’ in subparagraph (B) thereof. 

12 If any amount as adjusted under the preceding sentence 

13 is not a multiple of $10,000, such amount shall be round14 ed to the nearest multiple of $10,000.’’. 

15 (2) CONFORMING AMENDMENT.—Section 

16 6018(a)(1) of such Code is amended by striking 

17 ‘‘section 2010(c)’’ and inserting ‘‘section 2010’’. 

18 (c) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to estates of decedents dying, and 

20 gifts made, after the date of the enactment of this Act. 

21 SEC. 4. REPEAL OF ESTATE TAX BENEFIT FOR FAMILY22 OWNED BUSINESS INTERESTS. 

23 (a) IN GENERAL.—Section 2057 of the Internal Rev24 enue Code of 1986 (relating to family-owned business in25 terests) is hereby repealed. 
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1 (b) CONFORMING AMENDMENTS.—

2 (1) Paragraph (10) of section 2031(c) of such 

3 Code is amended by inserting ‘‘(as in effect on the 

4 day before the date of the enactment of the Estate 

5 Tax Relief Act of 2001)’’ before the period. 

6 (2) The table of sections for part IV of sub7 chapter A of chapter 11 of such Code is amended by 

8 striking the item relating to section 2057. 

9 (c) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to estates of decedents dying, and 

11 gifts made, after the date of the enactment of this Act.

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