I

104TH CONGRESS

1ST SESSION H. R. 1401

To establish for certain employees of international organizations an estate

tax credit equivalent to the limited marital deduction.

IN THE HOUSE OF REPRESENTATIVES

APRIL 5, 1995

Mr. HOUGHTON (for himself and Mr. GIBBONS) introduced the following bill;

which was referred to the Committee on Ways and Means

A BILL

To establish for certain employees of international organizations an estate tax credit equivalent to the limited marital deduction.

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

3 SECTION 1. CREDIT EQUIVALENT TO LIMITED MARITAL DE4 DUCTION IN CASE OF CERTAIN EMPLOYEES

5 OF INTERNATIONAL ORGANIZATIONS.

6 (a) IN GENERAL.—Subchapter C of chapter 11 of the

7 Internal Revenue Code of 1986 is amended by adding at

8 the end the following new section:
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1 ‘‘SEC. 2210. CREDIT EQUIVALENT TO LIMITED MARITAL DE2 DUCTION IN CASE OF CERTAIN EMPLOYEES

3 OF INTERNATIONAL ORGANIZATIONS.

4 ‘‘(a) GENERAL RULE.—In the case of a decedent to

5 whom this section applies, the tax determined under sec6 tion 2001(b) or 2101(b) (whichever is applicable) shall be

7 reduced by the applicable marital transfer credit deter8 mined under subsection (c).

9 ‘‘(b) DECEDENTS TO WHOM SECTION APPLIES.—

10 This section shall apply to a decedent if—

11 ‘‘(1) as of the date of the decedent’s death—

12 ‘‘(A) both the decedent and the surviving

13 spouse of the decedent were not citizens of the

14 United States and not lawful permanent resi15 dents of the United States, and

16 ‘‘(B) either the decedent or the surviving

17 spouse of the decedent was a qualified inter18 national organization employee, and

19 ‘‘(2) the executor of the decedent’s estate

20 waives the benefits of section 2056(d)(2).

21 ‘‘(c) APPLICABLE MARITAL TRANSFER CREDIT.—

22 ‘‘(1) ESTATES TAXABLE UNDER SECTION

23 2001.—

24 ‘‘(A) IN GENERAL.—If the estate of the

25 decedent is taxable under section 2001, the ap-
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1 plicable marital transfer credit is the excess

2 of—

3 ‘‘(i) a tentative tax computed under

4 section 2001(c) on the sum of the marital

5 transfer amount plus $600,000, over

6 ‘‘(ii) a tentative tax computed under

7 section 2001(c) on $600,000.

8 If the amount of the adjusted taxable gifts of

9 the decedent exceeds $600,000, the amount of

10 such gifts shall be substituted for ‘$600,000’ in

11 clauses (i) and (ii).

12 ‘‘(B) LIMITATION ON MARITAL TRANSFER

13 AMOUNT.—The amount of the marital transfer

14 amount taken into account under subparagraph

15 (A) shall not exceed the lesser of—

16 ‘‘(i) $600,000, or

17 ‘‘(ii) the excess of the sum referred to

18 in section 2001(b)(1) over $600,000.

19 ‘‘(2) ESTATES TAXABLE UNDER SECTION

20 2101.—If the estate of the decedent is taxable under

21 section 2101, the applicable marital transfer credit

22 shall be determined under the principles of para23 graph (1) with the following modifications—
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1 ‘‘(A) the $600,000 amount set forth in

2 subparagraph (B)(i) shall be reduced by the de3 duction equivalent of the unified credit, and

4 ‘‘(B) the deduction equivalent of the uni5 fied credit shall be substituted for ‘$600,000’

6 each place it appears in paragraph (1) other

7 than subparagraph (B)(i).

8 ‘‘(d) SPOUSE BECOMES CITIZEN.—This section shall

9 not apply in any case in which paragraph (1) of section

10 2056(d) does not apply by reason of paragraph (4) of such

11 section.

12 ‘‘(e) OTHER DEFINITIONS.—For purposes of this

13 section—

14 ‘‘(1) QUALIFIED INTERNATIONAL ORGANIZA15 TION EMPLOYEE.—The term ‘qualified international

16 organization employee’ means any full-time employee

17 of an international organization whose principal

18 place of employment with such organization is in the

19 United States.

20 ‘‘(2) MARITAL TRANSFER AMOUNT.—The term

21 ‘marital transfer amount’ means the amount which

22 would have been allowable as a deduction under sec23 tion 2056 or 2106(a)(3) (whichever is applicable) if

24 section 2056 were applied without regard to sub25 section (d) thereof.
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1 ‘‘(3) ADJUSTED TAXABLE GIFTS.—The term

2 ‘adjusted taxable gifts’ has the same meaning as

3 when used in section 2001 or 2101, whichever is ap4 plicable.

5 ‘‘(4) DEDUCTION EQUIVALENT OF UNIFIED

6 CREDIT.—The term ‘deduction equivalent of unified

7 credit’ means, with respect to any estate taxable

8 under section 2101, the amount on which the ten9 tative tax determined under section 2001(c) would

10 equal the unified credit allowed under section

11 2102(c).’’

12 (b) CLERICAL AMENDMENT.—The table of sections

13 for subchapter C of chapter 11 of such Code is amended

14 by adding at the end the following new item:

‘‘Sec. 2210. Credit equivalent to limited marital deduction in case

of certain employees of international organizations.’’

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

16 this section shall apply to the estates of decedents dying

17 after the date of the enactment of this Act.

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