I 

111TH CONGRESS 

1ST SESSION H. R. 2023 

To amend the Internal Revenue Code of 1986 to reform the estate and 

gift tax. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 22, 2009 

Mr. MCDERMOTT 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 reform 

the estate and gift tax. 

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 ‘‘Sensible Estate Tax 

5 Act of 2009’’. 

6 SEC. 2. RESTORATION OF ESTATE TAX; REPEAL OF CARRY7 OVER BASIS. 

8 (a) IN GENERAL.—The following provisions of the 

9 Economic Growth and Tax Relief Reconciliation Act of 


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1 2001, and the amendments made by such provisions, are 

2 hereby repealed: 

3 (1) Subtitles A and E of title V. 

4 (2) Subsection (d), and so much of subsection 

5 (f)(3) as relates to subsection (d), of section 511. 

6 (3) Paragraph (2) of subsection (b), and para7 graph (2) of subsection (e), of section 521. 

8 The Internal Revenue Code of 1986 shall be applied as 

9 if such provisions and amendments had never been en10 acted. 

11 (b) SUNSET NOT TO APPLY.— 

12 (1) Subsection (a) of section 901 of the Eco13 nomic Growth and Tax Relief Reconciliation Act of 

14 2001 is amended by striking ‘‘this Act’’ and all that 

15 follows and inserting ‘‘this Act (other than title V) 

16 shall not apply to taxable, plan, or limitation years 

17 beginning after December 31, 2010.’’. 

18 (2) Subsection (b) of such section 901 is 

19 amended by striking ‘‘, estates, gifts, and transfers’’. 

20 SEC. 3. UNIFIED CREDIT AGAINST THE ESTATE TAX. 

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

22 the Internal Revenue Code of 1986 (relating to applicable 

23 credit amount) is amended by striking all that follows ‘‘the 

24 applicable exclusion amount’’ and inserting ‘‘. For purVerDate Nov 24 2008 06:03 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2023.IH H2023

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1 poses of the preceding sentence, the applicable exclusion 

2 amount is $2,000,000.’’. 

3 (b) INFLATION ADJUSTMENT.—Subsection (c) of sec4 tion 2010 of such Code, as amended by subsection (a), 

5 is amended— 

6 (1) by striking ‘‘For purposes of this section,’’ 

7 and inserting the following: 

8 ‘‘(1) IN GENERAL.—For purposes of this sec9 tion,’’, and 

10 (2) by adding at the end the following new 

11 paragraph: 

12 ‘‘(2) INFLATION ADJUSTMENT.—In the case of 

13 any decedent dying in a calendar year after 2010, 

14 the $2,000,000 amount in paragraph (1) shall be in15 creased by an amount equal to— 

16 ‘‘(A) such dollar amount, multiplied by 

17 ‘‘(B) the cost-of-living adjustment deter18 mined under section 1(f)(3) for such calendar 

19 year, determined by substituting ‘2009’ for 

20 ‘1992’ in subparagraph (B) thereof. 

21 If any increase determined under the preceding sen22 tence is not a multiple of $10,000, such increase 

23 shall be rounded to the nearest multiple of 

24 $10,000.’’. 


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

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

3 gifts made, after December 31, 2009. 

4 SEC. 4. RATES OF TAX. 

5 (a) IN GENERAL.—The table in paragraph (1) of sec6 tion 2001(c) of the Internal Revenue Code of 1986 (relat7 ing to rate schedule) is amended by striking the last 3 

8 rows and inserting the following: 

‘‘Over $1,500,000 but not over 

$5,000,000.

$555,800, plus 45 percent of the excess of such amount over 

$1,500,000. 

Over $5,000,000 but not over 

$10,000,000.

$2,130,800, plus 50 percent of the 

excess of such amount over 

$5,000,000. 

Over $10,000,000 ........................ $4,630,800, plus 55 percent of the 

excess of such amount over 

$10,000,000.’’. 

9 (b) ADJUSTMENT FOR INFLATION.—Paragraph (2) 

10 of section 2001(c) of such Code is amended to read as 

11 follows: 

12 ‘‘(2) INFLATION ADJUSTMENT.—In the case of 

13 any decedent dying in a calendar year after 2010— 

14 ‘‘(A) each minimum and maximum dollar 

15 amount for each rate bracket in the table in 

16 paragraph (1) shall be increased by an amount 

17 equal to— 

18 ‘‘(i) such dollar amount, multiplied by 

19 ‘‘(ii) the cost-of-living adjustment de20 termined under section 1(f)(3) for such 

21 calendar year, determined by substituting 


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1 ‘2009’ for ‘1992’ in subparagraph (B) 

2 thereof, and 

3 ‘‘(B) each of the amounts setting forth the 

4 tax under such table shall be adjusted to the 

5 extent necessary to reflect the adjustments in 

6 the rate brackets made by subparagraph (A). 

7 If any increase determined under subparagraph 

8 (A) is not a multiple of $10,000, such increase 

9 shall be rounded to the nearest multiple of 

10 $10,000.’’. 

11 (c) EFFECTIVE DATE.—The amendment made by 

12 subsection (a) shall apply to estates of decedents dying, 

13 and gifts made, after December 31, 2009. 

14 SEC. 5. RESTORATION OF CREDIT FOR STATE DEATH TAX. 

15 (a) IN GENERAL.—Section 2011 of the Internal Rev16 enue Code of 1986 (relating to credit for State death 

17 taxes) is amended by striking subsection (f). 

18 (b) REPEAL OF DEDUCTION FOR STATE DEATH

19 TAXES.— 

20 (1) IN GENERAL.—Section 2058 of such Code 

21 (relating to State death taxes) is amended by adding 

22 at the end the following: 

23 ‘‘(c) TERMINATION.—This section shall not apply to 

24 the estates of decedents dying after December 31, 2009.’’. 


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1 (2) CONFORMING AMENDMENT.—Section 

2 2106(a)(4) of such Code is amended by adding at 

3 the end the following new sentence: ‘‘This paragraph 

4 shall not apply to the estates of decedents dying 

5 after December 31, 2009.’’. 

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

7 subsection (a) shall apply to estates of decedents dying, 

8 and gifts made, after December 31, 2008. 

9 SEC. 6. RESTORATION OF UNIFIED CREDIT AGAINST GIFT 

10 TAX. 

11 (a) IN GENERAL.—Paragraph (1) of section 2505(a) 

12 of the Internal Revenue Code of 1986 (relating to general 

13 rule for unified credit against gift tax) is amended by 

14 striking ‘‘(determined as if the applicable exclusion 

15 amount were $1,000,000)’’. 

16 (b) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to estates of decedents dying, gen18 eration-skipping transfers, and gifts made, after Decem19 ber 31, 2009. 

20 SEC. 7. UNIFIED CREDIT INCREASED BY UNUSED UNIFIED 

21 CREDIT OF DECEASED SPOUSE. 

22 (a) IN GENERAL.—Section 2010 of the Internal Rev23 enue Code of 1986, as amended by section 2, is amend24 ed— 


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1 (1) by striking the last sentence of paragraph 

2 (1), 

3 (2) by striking paragraph (2), and 

4 (3) by inserting after paragraph (1) the fol5 lowing new paragraph: 

6 ‘‘(2) APPLICABLE EXCLUSION AMOUNT.—For 

7 purposes of paragraph (1)— 

8 ‘‘(A) IN GENERAL.—The applicable exclu9 sion amount is the sum of— 

10 ‘‘(i) the basic exclusion amount, and 

11 ‘‘(ii) in the case of a surviving spouse, 

12 the aggregate deceased spousal unused ex13 clusion amount. 

14 ‘‘(B) BASIC EXCLUSION AMOUNT.— 

15 ‘‘(i) IN GENERAL.—For purposes of 

16 subparagraph (A), the basic exclusion 

17 amount is $2,000,000. 

18 ‘‘(ii) INFLATION ADJUSTMENT.—In 

19 the case of any decedent dying in a cal20 endar year after 2010, the $2,000,000 

21 amount in clause (i) shall be increased by 

22 an amount equal to— 

23 ‘‘(I) such dollar amount, multi24 plied by 


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1 ‘‘(II) the cost-of-living adjust2 ment determined under section 1(f)(3) 

3 for such calendar year by substituting 

4 ‘calendar year 2009’ for ‘calendar 

5 year 1992’ in subparagraph (B) there6 of. 

7 If any amount as adjusted under the pre8 ceding sentence is not a multiple of 

9 $100,000, such amount shall be rounded 

10 to the nearest multiple of $100,000. 

11 ‘‘(C) AGGREGATE DECEASED SPOUSAL UN12 USED EXCLUSION AMOUNT.—For purposes of 

13 this subsection— 

14 ‘‘(i) AGGREGATE DECEASED SPOUSAL

15 UNUSED EXCLUSION AMOUNT.—The term 

16 ‘aggregate deceased spousal unused exclu17 sion amount’ means the lesser of— 

18 ‘‘(I) the basic exclusion amount, 

19 or 

20 ‘‘(II) the sum of the deceased 

21 spousal unused exclusion amounts of 

22 the surviving spouse. 

23 ‘‘(ii) DECEASED SPOUSAL UNUSED

24 EXCLUSION AMOUNT.—For purposes of 

25 subsection (A), the term ‘deceased spousal 


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1 unused exclusion amount’ means, with re2 spect to the surviving spouse of any de3 ceased spouse dying after December 31, 

4 2009, the excess (if any) of— 

5 ‘‘(I) the applicable exclusion 

6 amount of the deceased spouse, over 

7 ‘‘(II) the amount with respect to 

8 which the tentative tax is determined 

9 under section 2001(b)(1) on the es10 tate of such deceased spouse. 

11 ‘‘(iii) SPECIAL RULES.— 

12 ‘‘(I) ELECTION REQUIRED.—A 

13 deceased spousal unused exclusion 

14 amount may not be taken into ac15 count by a surviving spouse under this 

16 paragraph unless the executor of the 

17 estate of the deceased spouse files an 

18 estate tax return on which such 

19 amount is computed and makes an 

20 election on such return that such 

21 amount may be so taken into account. 

22 Such election, once made, shall be ir23 revocable. No election may be made 

24 under this clause if such return is 

25 filed after the time prescribed by law 


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1 (including extensions) for filing such 

2 return. 

3 ‘‘(II) EXAMINATION OF PRIOR

4 RETURNS AFTER EXPIRATION OF PE5 RIOD OF LIMITATIONS WITH RESPECT

6 TO DECEASED SPOUSAL UNUSED EX7 CLUSION AMOUNT.—Notwithstanding 

8 any period of limitation in section 

9 6501, after the time has expired 

10 under section 6501 within which a tax 

11 may be assessed under chapter 11 or 

12 12 with respect to a deceased spousal 

13 unused exclusion amount, the Sec14 retary may examine a return of the 

15 deceased spouse to make determina16 tions with respect to such amount for 

17 purposes of carrying out this sub18 section. 

19 ‘‘(D) REGULATIONS.—The Secretary shall 

20 prescribe such regulations as may be necessary 

21 or appropriate to carry out this subsection.’’. 

22 (b) CONFORMING AMENDMENTS.— 

23 (1) Paragraph (1) of section 2505(a) of such 

24 Code, as amended by section 5, is amended to read 

25 as follows: 


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1 ‘‘(1) the applicable credit amount under section 

2 2010(c) which would apply if the donor died as of 

3 the end of the calendar year, reduced by’’. 

4 (2) Section 2631(c) of such Code is amended by 

5 striking ‘‘the applicable exclusion amount’’ and in6 serting ‘‘the basic exclusion amount’’. 

7 (3) Section 6018(a)(1) of such Code is amended 

8 by striking ‘‘applicable exclusion amount’’ and in9 serting ‘‘basic exclusion amount’’. 

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

11 this section shall apply to estates of decedents dying, gen12 eration-skipping transfers, and gifts made, after Decem13 ber 31, 2009. 

Æ 


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