II 

118TH CONGRESS 

1ST SESSION S. 1178 

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

generation-skipping taxes, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 18, 2023 

Mr. SANDERS (for himself and Ms. WARREN) 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 reinstate 

estate and generation-skipping taxes, 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 ‘‘For the 99.5 Percent 

5 Act’’. 

6 SEC. 2. MODIFICATIONS TO ESTATE, GIFT, AND GENERA7 TION-SKIPPING TRANSFER TAXES. 

8 (a) MODIFICATION OF RATES.—Section 2001(c) of 

9 the Internal Revenue Code of 1986 is amended by striking 

10 the last 2 rows and inserting the following: 


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‘‘Over $750,000 but not over $3,500,000 ............. $248,300 plus 39 percent of the excess of 

such amount over 

$750,000. 

Over $3,500,000 but not over $10,000,000 ......... $1,320,800 plus 45 

percent of the excess of such amount 

over $3,500,000. 

Over $10,000,000 but not over $50,000,000 ....... $4,245,800 plus 50 

percent of the excess of such amount 

over $10,000,000. 

Over $50,000,000 but not over $1,000,000,000 .. $24,245,800 plus 55 

percent of the excess of such amount 

over $50,000,000. 

Over $1,000,000,000 ............................................. $546,745,800 plus 65 

percent of the excess of such amount 

over 

$1,000,000,000.’’. 

1 (b) EXCLUSION AMOUNT.— 

2 (1) ESTATE TAX.—Paragraph (3) of section 

3 2010(c) of the Internal Revenue Code of 1986 is 

4 amended to read as follows: 

5 ‘‘(3) BASIC EXCLUSION AMOUNT.—For pur6 poses of this subsection, the basic exclusion amount 

7 is $3,500,000.’’. 

8 (2) MODIFICATION TO GIFT TAX EXCLUSION

9 AMOUNT.—Paragraph (1) of section 2505(a) of the 

10 Internal Revenue Code of 1986 is amended to read 

11 as follows: 

12 ‘‘(1) the applicable credit amount in effect 

13 under section 2010(c) for such calendar year (deter14 mined as if the basic exclusion amount in section 

15 2010(c)(2)(A) were $1,000,000), reduced by’’. 


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

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

3 generation-skipping transfers and gifts made, after De4 cember 31, 2023. 

5 SEC. 3. MODIFICATION OF RULES FOR VALUE OF CERTAIN 

6 FARM, ETC., REAL PROPERTY. 

7 (a) IN GENERAL.—Paragraph (2) of section 

8 2032A(a) of the Internal Revenue Code of 1986 is amend9 ed by striking ‘‘$750,000’’ and inserting ‘‘$3,000,000’’. 

10 (b) INFLATION ADJUSTMENT.—Paragraph (3) of sec11 tion 2032A(a) of such Code is amended— 

12 (1) by striking ‘‘1998’’ and inserting ‘‘2024’’, 

13 (2) by striking ‘‘$750,000’’ each place it ap14 pears and inserting ‘‘$3,000,000’’, and 

15 (3) by striking ‘‘calendar year 1997’’ and in16 serting ‘‘calendar year 2023’’ in subparagraph (B). 

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

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

19 gifts made, after December 31, 2023. 

20 SEC. 4. MODIFICATION OF ESTATE TAX RULES WITH RE21 SPECT TO LAND SUBJECT TO CONSERVATION 

22 EASEMENTS. 

23 (a) MODIFICATION OF EXCLUSION LIMITATION.— 

24 Subparagraph (B) of section 2031(c)(1) of the Internal 


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1 Revenue Code of 1986 is amended by striking ‘‘$500,000’’ 

2 and inserting ‘‘$2,000,000’’. 

3 (b) MODIFICATION OF APPLICABLE PERCENTAGE.— 

4 Paragraph (2) of section 2031(c) of the Internal Revenue 

5 Code of 1986 is amended by striking ‘‘40 percent’’ and 

6 inserting ‘‘60 percent’’. 

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

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

9 gifts made, after December 31, 2023. 

10 SEC. 5. CLARIFICATION REGARDING DISALLOWANCE OF 

11 STEP-UP IN BASIS FOR PROPERTY HELD IN 

12 CERTAIN GRANTOR TRUSTS. 

13 (a) IN GENERAL.—Section 1014 of the Internal Rev14 enue Code of 1986 is amended— 

15 (1) by redesignating subsection (f) as sub16 section (g), and 

17 (2) by inserting after subsection (e) the fol18 lowing: 

19 ‘‘(f) PROPERTY HELD IN CERTAIN GRANTOR

20 TRUSTS.—This section shall not apply to property— 

21 ‘‘(1) held in a trust of which the transferor is 

22 considered the owner under subpart E of part I of 

23 subchapter J, and 


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1 ‘‘(2) if, after the transfer of such property to 

2 the trust, such property is not includible in the gross 

3 estate of the transferor for purposes of chapter 11.’’. 

4 (b) CONFORMING AMENDMENT.—Section 6662(k) of 

5 the Internal Revenue Code of 1986 is amended by striking 

6 ‘‘1014(f)’’ and inserting ‘‘1014(g)’’. 

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

8 this section shall apply to transfers after the date of the 

9 enactment of this Act. 

10 (d) NO INFERENCE.—No inference may be drawn 

11 from the amendments made by this section with respect 

12 to the application of section 1014 of the Internal Revenue 

13 Code of 1986 to property described in subsection (f) of 

14 such section (as added by subsection (a)) which was trans15 ferred on or before the date of enactment of this Act. 

16 SEC. 6. LIMITATION ON DISCOUNTS; VALUATION RULES 

17 FOR CERTAIN TRANSFERS OF NONBUSINESS 

18 ASSETS. 

19 (a) IN GENERAL.—Chapter 14 of subtitle B of the 

20 Internal Revenue Code of 1986 is amended by adding at 

21 the end the following new section: 


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1 ‘‘SEC. 2705. LIMITATION ON DISCOUNTS; VALUATION RULES 

2 FOR CERTAIN TRANSFERS OF NONBUSINESS 

3 ASSETS. 

4 ‘‘(a) LIMITATION ON DISCOUNT BY REASON OF FAM5 ILY CONTROL.— 

6 ‘‘(1) IN GENERAL.—For purposes of this sub7 title, in the case of the transfer of any interest in 

8 an entity other than an interest which is actively 

9 traded (within the meaning of section 1092), if the 

10 transferor, the transferee, and members of the fam11 ily of the transferor and transferee have control of 

12 such entity immediately before such transfer, no dis13 count shall be allowed— 

14 ‘‘(A) by reason of the fact that the trans15 feror or transferee does not have control of 

16 such entity, 

17 ‘‘(B) by reason of the lack of marketability 

18 of the interest, or 

19 ‘‘(C) for any other reason. 

20 ‘‘(2) DEFINITIONS.—In this subsection, the 

21 terms ‘control’ and ‘member of the family’ have the 

22 same meanings given such terms in section 2704(c). 

23 ‘‘(3) ATTRIBUTION.—For purposes of this sec24 tion, the rule of section 2701(e)(3) shall apply for 

25 purposes of determining the interests held by any in26 dividual. 


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1 ‘‘(b) VALUATION RULES FOR CERTAIN TRANSFERS

2 OF NONBUSINESS ASSETS.— 

3 ‘‘(1) IN GENERAL.—For purposes of this sub4 title, in the case of the transfer of any interest in 

5 an entity other than an interest which is actively 

6 traded (within the meaning of section 1092)— 

7 ‘‘(A) the value of any nonbusiness assets 

8 held by the entity with respect to such interest 

9 shall be determined as if the transferor had 

10 transferred such assets directly to the trans11 feree (and no valuation discount shall be al12 lowed with respect to such nonbusiness assets), 

13 and 

14 ‘‘(B) such nonbusiness assets shall not be 

15 taken into account in determining the value of 

16 the interest in the entity. 

17 ‘‘(2) NONBUSINESS ASSETS.—For purposes of 

18 this subsection— 

19 ‘‘(A) IN GENERAL.—The term ‘nonbusi20 ness asset’ means any asset other than an asset 

21 which is used in the active conduct of a trade 

22 or business. 

23 ‘‘(B) PASSIVE ASSETS TREATED AS NON24 BUSINESS ASSETS.— 


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1 ‘‘(i) IN GENERAL.—For purposes of 

2 subparagraph (A), a passive asset shall be 

3 treated as a nonbusiness asset unless— 

4 ‘‘(I) the asset is property de5 scribed in paragraph (1) or (4) of sec6 tion 1221(a) or is a hedge with re7 spect to such property, or 

8 ‘‘(II) the asset is real property 

9 used in the active conduct of 1 or 

10 more real property trades or busi11 nesses (within the meaning of section 

12 469(c)(7)(C)) in which the transferor 

13 materially participates and with re14 spect to which the transferor meets 

15 the requirements of section 

16 469(c)(7)(B)(ii). 

17 ‘‘(ii) MATERIAL PARTICIPATION.—For 

18 purposes of clause (i)(II), material partici19 pation shall be determined under the rules 

20 of section 469(h), except that section 

21 469(h)(3) shall be applied without regard 

22 to the limitation to farming activity. 

23 ‘‘(C) WORKING CAPITAL TREATED AS

24 USED IN TRADE OR BUSINESS.—Any asset (in25 cluding a passive asset) which is held as a part 


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1 of the reasonably required working capital 

2 needs of a trade or business shall be treated as 

3 used in the active conduct of a trade or busi4 ness. 

5 ‘‘(3) PASSIVE ASSET.—For purposes of this 

6 subsection, the term ‘passive asset’ means any— 

7 ‘‘(A) cash or cash equivalents, 

8 ‘‘(B) stock in a corporation or any other 

9 equity, profits, or capital interest in any entity, 

10 ‘‘(C) evidence of indebtedness, option, for11 ward or futures contract, notional principal con12 tract, or derivative, 

13 ‘‘(D) asset described in clause (iii), (iv), or 

14 (v) of section 351(e)(1)(B), 

15 ‘‘(E) annuity, 

16 ‘‘(F) real property used in 1 or more real 

17 property trades or businesses (as defined in sec18 tion 469(c)(7)(C)), 

19 ‘‘(G) asset (other than a patent, trade20 mark, or copyright) which produces royalty in21 come, 

22 ‘‘(H) commodity, 

23 ‘‘(I) collectible (within the meaning of sec24 tion 408(m)), or 


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1 ‘‘(J) any other asset specified in regula2 tions prescribed by the Secretary. 

3 ‘‘(4) LOOK-THRU RULE.— 

4 ‘‘(A) IN GENERAL.—If a nonbusiness asset 

5 of an entity described in paragraph (1) consists 

6 of a 10-percent interest in any other entity, this 

7 subsection shall be applied by disregarding the 

8 10-percent interest and by treating the entity 

9 as holding directly its ratable share of the as10 sets of the other entity. 

11 ‘‘(B) 10-PERCENT INTEREST.—The term 

12 ‘10-percent interest’ means— 

13 ‘‘(i) in the case of an interest in a cor14 poration, direct ownership of at least 10 

15 percent (by vote or value) of the stock in 

16 such corporation, 

17 ‘‘(ii) in the case of an interest in a 

18 partnership, direct ownership of at least 10 

19 percent of the capital or profits interest in 

20 the partnership, and 

21 ‘‘(iii) in any other case, direct owner22 ship of at least 10 percent of the beneficial 

23 interests in the entity.’’. 

24 (b) CONFORMING AMENDMENTS.— 


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1 (1) Section 2031(b) of the Internal Revenue 

2 Code of 1986 is amended by inserting ‘‘(after appli3 cation of section 2705(b))’’ after ‘‘shall be deter4 mined’’. 

5 (2) The table of sections of chapter 14 of sub6 title B of such Code is amended by adding at the 

7 end the following: 

‘‘Sec. 2705. Limitation on discounts; valuation rules for certain transfers of 

nonbusiness assets.’’. 

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

9 this section shall apply to transfers after the date of the 

10 enactment of this Act. 

11 SEC. 7. REQUIRED MINIMUM 10-YEAR TERM, ETC., FOR 

12 GRANTOR RETAINED ANNUITY TRUSTS. 

13 (a) IN GENERAL.—Subsection (b) of section 2702 of 

14 the Internal Revenue Code of 1986 is amended— 

15 (1) by redesignating paragraphs (1), (2), and 

16 (3) as subparagraphs (A), (B), and (C), respectively, 

17 and by moving such subparagraphs (as so redesig18 nated) 2 ems to the right; 

19 (2) by striking ‘‘For purposes of’’ and inserting 

20 the following: 

21 ‘‘(1) IN GENERAL.—For purposes of’’; 

22 (3) by striking ‘‘paragraph (1) or (2)’’ in para23 graph (1)(C) (as so redesignated) and inserting 

24 ‘‘subparagraph (A) or (B)’’; and 


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1 (4) by adding at the end the following new 

2 paragraph: 

3 ‘‘(2) ADDITIONAL REQUIREMENTS WITH RE4 SPECT TO GRANTOR RETAINED ANNUITIES.—For 

5 purposes of subsection (a), in the case of an interest 

6 described in paragraph (1)(A) (determined without 

7 regard to this paragraph) which is retained by the 

8 transferor, such interest shall be treated as de9 scribed in such paragraph only if— 

10 ‘‘(A) the right to receive the fixed amounts 

11 referred to in such paragraph is for a term of 

12 not less than 10 years and not more than the 

13 life expectancy of the annuitant plus 10 years, 

14 ‘‘(B) such fixed amounts, when determined 

15 on an annual basis, do not decrease during the 

16 term described in subparagraph (A), and 

17 ‘‘(C) the remainder interest has a value, as 

18 determined as of the time of the transfer, which 

19 is— 

20 ‘‘(i) not less than an amount equal to 

21 the greater of— 

22 ‘‘(I) 25 percent of the fair mar23 ket value of the property in the trust, 

24 or 

25 ‘‘(II) $500,000, and 


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1 ‘‘(ii) not greater than the fair market 

2 value of the property in the trust.’’. 

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

4 this section shall apply to transfers made after the date 

5 of the enactment of this Act. 

6 SEC. 8. CERTAIN TRANSFER TAX RULES APPLICABLE TO 

7 GRANTOR TRUSTS. 

8 (a) IN GENERAL.—Subtitle B of the Internal Rev9 enue Code of 1986 is amended by adding at the end the 

10 following new chapter: 

11 ‘‘CHAPTER 16—SPECIAL RULES FOR 

12 GRANTOR TRUSTS 

‘‘Sec. 2901. Application of transfer taxes. 

13 ‘‘SEC. 2901. APPLICATION OF TRANSFER TAXES. 

14 ‘‘(a) IN GENERAL.—In the case of any portion of a 

15 trust to which this section applies— 

16 ‘‘(1) the value of the gross estate of the de17 ceased deemed owner of such portion shall include 

18 all assets attributable to that portion at the time of 

19 the death of such owner, 

20 ‘‘(2) any distribution from such portion to one 

21 or more beneficiaries during the life of the deemed 

22 owner of such portion shall be treated as a transfer 

23 by gift for purposes of chapter 12, and 


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1 ‘‘(3) if at any time during the life of the 

2 deemed owner of such portion, such owner ceases to 

3 be treated as the owner of such portion under sub4 part E of part 1 of subchapter J of chapter 1, all 

5 assets attributable to such portion at such time shall 

6 be treated for purposes of chapter 12 as a transfer 

7 by gift made by the deemed owner. 

8 ‘‘(b) PORTION OF TRUST TO WHICH SECTION AP9 PLIES.—This section shall apply to— 

10 ‘‘(1) the portion of a trust with respect to 

11 which the grantor is the deemed owner, and 

12 ‘‘(2) the portion of the trust to which a person 

13 who is not the grantor is a deemed owner by reason 

14 of the rules of subpart E of part 1 of subchapter J 

15 of chapter 1, and such deemed owner engages in a 

16 sale, exchange, or comparable transaction with the 

17 trust that is disregarded for purposes of subtitle A. 

18 For purposes of paragraph (2), the portion of the trust 

19 described with respect to a transaction is the portion of 

20 the trust attributable to the property received by the trust 

21 in such transaction, including all retained income there22 from, appreciation thereon, and reinvestments thereof, net 

23 of the amount of consideration received by the deemed 

24 owner in such transaction. 


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1 ‘‘(c) EXCEPTIONS.—This section shall not apply to 

2 any trust that is includible in the gross estate of the 

3 deemed owner (without regard to subsection (a)(1)). 

4 ‘‘(d) DEEMED OWNER DEFINED.—For purposes of 

5 this section, the term ‘deemed owner’ means any person 

6 who is treated as the owner of a portion of a trust under 

7 subpart E of part 1 of subchapter J of chapter 1. 

8 ‘‘(e) REDUCTION FOR TAXABLE GIFTS TO TRUST

9 MADE BY OWNER.—The amount to which subsection (a) 

10 applies shall be reduced by the value of any transfer by 

11 gift by the deemed owner to the trust previously taken 

12 into account by the deemed owner under chapter 12. 

13 ‘‘(f) LIABILITY FOR PAYMENT OF TAX.—Any tax im14 posed pursuant to subsection (a) shall be a liability of the 

15 trust.’’. 

16 (b) CLERICAL AMENDMENT.—The table of chapters 

17 for subtitle B of such Code is amended by adding at the 

18 end the following new item: 

‘‘CHAPTER 16. SPECIAL RULES FOR GRANTOR TRUSTS’’. 

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

20 this section shall apply— 

21 (1) to trusts created on or after the date of the 

22 enactment of this Act, 

23 (2) to any portion of a trust established before 

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1 utable to a contribution made on or after such date, 

2 and 

3 (3) to any portion of a trust established before 

4 the date of the enactment of this Act to which sec5 tion 2901(a) of the Internal Revenue Code of 1986 

6 (as added by subsection (a)) applies by reason of a 

7 transaction described in section 2901(b)(2) of such 

8 Code on or after such date. 

9 SEC. 9. ELIMINATION OF GENERATION-SKIPPING TRANS10 FER TAX EXEMPTION FOR TRANSFERS TO 

11 CERTAIN PERSONS. 

12 (a) IN GENERAL.—Section 2642 of the Internal Rev13 enue Code of 1986 is amended by adding at the end the 

14 following new subsection: 

15 ‘‘(h) ELIMINATION OF GST EXEMPTION FOR TRANS16 FERS TO CERTAIN PERSONS.— 

17 ‘‘(1) IN GENERAL.— 

18 ‘‘(A) TRANSFER TO NON-EXEMPT PER19 SON.—In the case of any direct skip or taxable 

20 distribution made to any person who is not an 

21 exempt person, the inclusion ratio shall be 1. 

22 ‘‘(B) TAXABLE TERMINATION.—In the 

23 case of any taxable termination which occurs at 

24 any time immediately after no exempt person is 


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1 a beneficiary of the trust, the inclusion ratio 

2 shall be 1. 

3 ‘‘(C) EXEMPT PERSON.— 

4 ‘‘(i) IN GENERAL.—For purposes of 

5 this subsection, the term ‘exempt person’ 

6 means— 

7 ‘‘(I) a natural person— 

8 ‘‘(aa) who is assigned to a 

9 generation which is 2 or fewer 

10 generations below the generation 

11 assignment of the transferor, or 

12 ‘‘(bb) whose date of birth 

13 precedes the date on which the 

14 trust was created, or 

15 ‘‘(II) a trust in which all inter16 ests are held by persons described in 

17 subclause (I). 

18 ‘‘(ii) EXCEPTION.—For purposes of 

19 clause (i)(II), any interest which is used 

20 primarily to postpone or avoid the applica21 tion of this subsection shall be disregarded. 

22 ‘‘(2) DATE OF CREATION.— 

23 ‘‘(A) IN GENERAL.—For purposes of deter24 mining the date on which a trust was created 

25 under paragraph (1)(C)(i)(I)(bb), if the trust 


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1 was created before January 1, 2024, such trust 

2 shall be deemed to have been created on Janu3 ary 1, 2024. 

4 ‘‘(B) DATE OF CREATION OF POUR-OVER

5 TRUSTS.— 

6 ‘‘(i) IN GENERAL.—In the case of any 

7 generation-skipping transfer of property 

8 which involves the transfer of property 

9 from one trust to another trust, the date 

10 of the creation of the transferee trust shall 

11 be treated as being the earlier of— 

12 ‘‘(I) the date of the creation of 

13 such transferee trust, or 

14 ‘‘(II) the date of the creation of 

15 the transferor trust. 

16 ‘‘(ii) MULTIPLE TRANSFERS.—In the 

17 case of multiple transfers to which clause 

18 (i) applies— 

19 ‘‘(I) the date of the creation of 

20 the transferor trust shall be deter21 mined under such clause, and 

22 ‘‘(II) subsequent to the deter23 mination described in subclause (I), 

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1 feree trust shall be determined under 

2 such clause. 

3 ‘‘(3) GENERATION ASSIGNMENT.—For purposes 

4 of this subsection, the provisions of section 2653(a) 

5 shall not apply. 

6 ‘‘(4) REGULATIONS.—The Secretary may pre7 scribe such regulations or other guidance as may be 

8 necessary or appropriate to carry out this sub9 section.’’. 

10 (b) REPEAL.—Section 1433(b)(2) of the Tax Reform 

11 Act of 1986 (Public Law 99–514) is repealed. 

12 (c) EFFECTIVE DATES.— 

13 (1) IN GENERAL.—The amendment made by 

14 subsection (a) shall take effect on the date of the en15 actment of this Act. 

16 (2) REPEAL.—The amendment made by sub17 section (b) shall apply to generation-skipping trans18 fers (within the meaning of section 2611 of the In19 ternal Revenue Code of 1986) made after the date 

20 of enactment of this Act. 

21 SEC. 10. SIMPLIFYING GIFT TAX EXCLUSION FOR ANNUAL 

22 GIFTS. 

23 (a) IN GENERAL.—Paragraph (1) of section 2503(b) 

24 of the Internal Revenue Code of 1986 is amended to read 

25 as follows: 


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1 ‘‘(1) IN GENERAL.— 

2 ‘‘(A) LIMIT PER DONEE.—In the case of 

3 gifts made to any person by the donor during 

4 the calendar year, the first $10,000 of such 

5 gifts to such person shall not, for purposes of 

6 subsection (a), be included in the total amount 

7 of gifts made during such year. 

8 ‘‘(B) CUMULATIVE LIMIT PER DONOR.— 

9 ‘‘(i) IN GENERAL.—The aggregate 

10 amount excluded under subparagraph (A) 

11 with respect to all transfers described in 

12 clause (ii) made by the donor during the 

13 calendar year shall not exceed twice the 

14 dollar amount in effect under such sub15 paragraph for such calendar year. 

16 ‘‘(ii) TRANSFERS SUBJECT TO LIMITA17 TION.—The transfers described in this 

18 clause are— 

19 ‘‘(I) a transfer in trust, 

20 ‘‘(II) a transfer of an interest in 

21 a passthrough entity, 

22 ‘‘(III) a transfer of an interest 

23 subject to a prohibition on sale, and 

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1 drawal, put, or other such rights in 

2 the donee, cannot immediately be liq3 uidated by the donee.’’. 

4 (b) CONFORMING AMENDMENT.—Section 2503 of the 

5 Internal Revenue Code of 1986 is amended by striking 

6 subsection (c). 

7 (c) REGULATIONS.—The Secretary of the Treasury, 

8 or the Secretary of the Treasury’s delegate, may prescribe 

9 such regulations or other guidance as may be necessary 

10 or appropriate to carry out the amendments made by this 

11 section. 

12 (d) EFFECTIVE DATE.—The amendments made by 

13 this section shall apply to any calendar year beginning 

14 after the date of the enactment of this Act. 

15 SEC. 11. GROSS UP FOR TAXABLE GIFTS. 

16 (a) IN GENERAL.—Section 2503 of the Internal Rev17 enue Code of 1986, as amended by section 10, is amend18 ed— 

19 (1) in subsection (a), by striking ‘‘The term’’ 

20 and inserting ‘‘Subject to subsection (c), the term’’, 

21 and 

22 (2) by inserting after subsection (b) the fol23 lowing: 

24 ‘‘(c) GROSS UP.—An amount equal to the taxes paid 

25 by an individual under section 2501 for any calendar year 


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1 on the transfer of property by gift during such calendar 

2 year shall be treated for purposes of this subtitle as a tax3 able gift made during such calendar year.’’. 

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

5 this section shall apply to calendar years beginning after 

6 the date of enactment of this Act. 

7 SEC. 12. DEFINITION OF EXECUTOR. 

8 (a) ESTABLISHMENT OF GENERAL DEFINITION OF

9 EXECUTOR FOR INTERNAL REVENUE CODE OF 1986.— 

10 (1) Subchapter C of chapter 11 of subtitle B of 

11 the Internal Revenue Code of 1986 is amended by 

12 striking section 2203. 

13 (2) Section 7701(a) of such Code is amended 

14 by adding at the end the following: 

15 ‘‘(51) EXECUTOR.— 

16 ‘‘(A) IN GENERAL.—The term ‘executor’ 

17 means— 

18 ‘‘(i) the executor or administrator of 

19 the decedent, or 

20 ‘‘(ii) if there is no executor or admin21 istrator appointed, qualified, and acting 

22 within the United States, any person in ac23 tual or constructive possession of any prop24 erty of the decedent. 


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1 ‘‘(B) AUTHORITY.—For purposes of this 

2 title, an executor shall be authorized to act on 

3 behalf of the decedent, including with respect to 

4 any liability or obligation incurred under this 

5 title which preceded the death of the decedent. 

6 ‘‘(C) REGULATIONS.—The Secretary shall 

7 issue such regulations or other guidance as may 

8 be necessary or appropriate to determine the 

9 executor of a decedent in the case where 2 or 

10 more persons satisfy the applicable require11 ments under subparagraph (A) with respect to 

12 the decedent.’’. 

13 (b) CONFORMING AMENDMENTS.— 

14 (1) Section 2652 of the Internal Revenue Code 

15 of 1986 is amended by striking subsection (d). 

16 (2) Section 6036 of such Code is amended by 

17 striking ‘‘(as defined in section 2203)’’. 

18 (3) The table of sections for subchapter C of 

19 chapter 11 of subtitle B of such Code is amended 

20 by striking the item relating to section 2203. 

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

22 this section shall take effect on the date of enactment of 

23 this Act. 

Æ 


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