I 

111TH CONGRESS 

1ST SESSION H. R. 498 

To make permanent the individual income tax rates for capital gains, and 

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 14, 2009 

Mr. MITCHELL (for himself and Mr. KIRK) introduced the following bill; which 

was referred to the Committee on Ways and Means 

A BILL 

To make permanent the individual income tax rates for 

capital gains, 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 ‘‘Capital Gains and Es5 tate Tax Relief Act of 2009’’. 

6 SEC. 2. INDIVIDUAL INCOME TAX RATES FOR CAPITAL 

7 GAINS MADE PERMANENT. 

8 Section 303 of the Jobs and Growth Tax Relief Rec9 onciliation Act of 2003 is amended by striking ‘‘this title’’ 

10 and inserting ‘‘section 302’’. 


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1 SEC. 3. REFORM AND EXTENSION OF ESTATE TAX AFTER 

2 2009. 

3 (a) RESTORATION OF UNIFIED CREDIT AGAINST

4 GIFT TAX.—Paragraph (1) of section 2505(a) of the In5 ternal Revenue Code of 1986 (relating to general rule for 

6 unified credit against gift tax), after the application of 

7 subsection (g), is amended by striking ‘‘(determined as if 

8 the applicable exclusion amount were $1,000,000)’’. 

9 (b) EXCLUSION EQUIVALENT OF UNIFIED CREDIT

10 INCREASED TO $5,000,000.—Subsection (c) of section 

11 2010 of such Code (relating to unified credit against es12 tate tax) is amended to read as follows: 

13 ‘‘(c) APPLICABLE CREDIT AMOUNT.— 

14 ‘‘(1) IN GENERAL.—For purposes of this sec15 tion, the applicable credit amount is the amount of 

16 the tentative tax which would be determined under 

17 the rate schedule set forth in section 2001(c) if the 

18 amount with respect to which such tentative tax is 

19 to be computed were the applicable exclusion 

20 amount. 

21 ‘‘(2) APPLICABLE EXCLUSION AMOUNT.— 

22 ‘‘(A) IN GENERAL.—For purposes of this 

23 subsection, the applicable exclusion amount is 

24 as follows: 

25 ‘‘(i) For calendar year 2010, 

26 $3,750,000. 


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1 ‘‘(ii) For calendar year 2011, 

2 $4,000,000. 

3 ‘‘(iii) For calendar year 2012, 

4 $4,250,000. 

5 ‘‘(iv) For calendar year 2013, 

6 $4,500,000. 

7 ‘‘(v) For calendar year 2014, 

8 $4,750,000. 

9 ‘‘(vi) For calendar year 2015 and 

10 thereafter, $5,000,000. 

11 ‘‘(B) INFLATION ADJUSTMENT.—In the 

12 case of any decedent dying in a calendar year 

13 after 2015, the $5,000,000 amount in subpara14 graph (A)(vi) shall be increased by an amount 

15 equal to— 

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

17 ‘‘(ii) the cost-of-living adjustment de18 termined under section 1(f)(3) for such 

19 calendar year by substituting ‘calendar 

20 year 2014’ for ‘calendar year 1992’ in sub21 paragraph (B) thereof. 

22 If any amount as adjusted under the preceding 

23 sentence is not a multiple of $50,000, such 

24 amount shall be rounded to the nearest multiple 

25 of $50,000.’’. 


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1 (c) RATE SCHEDULE.— 

2 (1) IN GENERAL.—Subsection (c) of section 

3 2001 of such Code (relating to rate schedule) is 

4 amended to read as follows: 

5 ‘‘(c) RATE SCHEDULE.— 

6 ‘‘(1) IN GENERAL.—The tentative tax is equal 

7 to the sum of— 

8 ‘‘(A) the product of the rate specified in 

9 section 1(h)(1)(C) in effect on the date of the 

10 decedent’s death multiplied by so much of the 

11 sum described in subsection (b)(1) as does not 

12 exceed $25,000,000, and 

13 ‘‘(B) twice the rate specified in section 

14 1(h)(1)(C) in effect on the date of the dece15 dent’s death of so much of the sum described 

16 in subsection (b)(1) as exceeds $25,000,000. 

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

18 any decedent dying in a calendar year after 2015, 

19 each $25,000,000 amount in subparagraphs (A) and 

20 (B) of paragraph (1) shall be increased by an 

21 amount equal to— 

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

23 ‘‘(B) the cost-of-living adjustment deter24 mined under section 1(f)(3) for such calendar 

25 year by substituting ‘calendar year 2014’ for 


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1 ‘calendar year 1992’ in subparagraph (B) 

2 thereof. 

3 If any amount as adjusted under the preceding sen4 tence is not a multiple of $50,000, such amount 

5 shall be rounded to the nearest multiple of 

6 $50,000.’’. 

7 (2) CONFORMING AMENDMENT.—Section 

8 2502(a) of such Code (relating to computation of 

9 tax), after the application of subsection (g), is 

10 amended by adding at the end the following flush 

11 sentence: 

12 ‘‘In computing the tentative tax under section 2001(c) for 

13 purposes of this subsection, ‘the last day of the calendar 

14 year in which the gift was made’ shall be substituted for 

15 ‘the date of the decedent’s death’ each place it appears 

16 in such section.’’. 

17 (d) MODIFICATIONS OF ESTATE AND GIFT TAXES TO

18 REFLECT DIFFERENCES IN UNIFIED CREDIT RESULTING

19 FROM DIFFERENT TAX RATES.— 

20 (1) ESTATE TAX.— 

21 (A) IN GENERAL.—Section 2001(b)(2) of 

22 such Code (relating to computation of tax) is 

23 amended by striking ‘‘if the provisions of sub24 section (c) (as in effect at the decedent’s 


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1 death)’’ and inserting ‘‘if the modifications de2 scribed in subsection (g)’’. 

3 (B) MODIFICATIONS.—Section 2001 of 

4 such Code is amended by adding at the end the 

5 following new subsection: 

6 ‘‘(g) MODIFICATIONS TO GIFT TAX PAYABLE TO RE7 FLECT DIFFERENT TAX RATES.—For purposes of apply8 ing subsection (b)(2) with respect to 1 or more gifts, the 

9 rates of tax under subsection (c) in effect on the date of 

10 the decedent’s death shall, in lieu of the rates of tax in 

11 effect at the time of such gifts, be used both to compute— 

12 ‘‘(1) the tax imposed by chapter 12 with respect 

13 to such gifts, and 

14 ‘‘(2) the credit allowed against such tax under 

15 section 2505, including in computing— 

16 ‘‘(A) the applicable credit amount under 

17 section 2505(a)(1), and 

18 ‘‘(B) the sum of the amounts allowed as a 

19 credit for all preceding periods under section 

20 2505(a)(2). 

21 For purposes of paragraph (2)(A), the applicable 

22 credit amount for any calendar year before 1998 is 

23 the amount which would be determined under sec24 tion 2010(c) if the applicable exclusion amount were 


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1 the dollar amount under section 6018(a)(1) for such 

2 year.’’. 

3 (2) GIFT TAX.—Section 2505(a) of such Code 

4 (relating to unified credit against gift tax), after the 

5 application of subsection (g), is amended by adding 

6 at the end the following new flush sentence: 

7 ‘‘For purposes of applying paragraph (2) for any calendar 

8 year, the rate schedule under section 2001(c) used in com9 puting the applicable credit amount under paragraph (1) 

10 for such calendar year shall, in lieu of the rates of tax 

11 in effect for preceding calendar periods, be used in deter12 mining the amounts allowable as a credit under this sec13 tion for all preceding calendar periods.’’. 

14 (e) REPEAL OF DEDUCTION FOR STATE DEATH

15 TAXES.— 

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

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

18 at the end the following: 

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

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

21 (2) CONFORMING AMENDMENT.—Section 

22 2106(a)(4) of such Code is amended by adding at 

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

24 shall not apply to the estates of decedents dying 

25 after December 31, 2009.’’. 


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

2 this section shall apply to estates of decedents dying, gen3 eration-skipping transfers, and gifts made, after Decem4 ber 31, 2009. 

5 (g) ADDITIONAL MODIFICATIONS TO ESTATE TAX.— 

6 (1) IN GENERAL.—The following provisions of 

7 the Economic Growth and Tax Relief Reconciliation 

8 Act of 2001, and the amendments made by such 

9 provisions, are hereby repealed: 

10 (A) Subtitles A and E of title V. 

11 (B) Subsection (d), and so much of sub12 section (f)(3) as relates to subsection (d), of 

13 section 511. 

14 (C) Paragraph (2) of subsection (b), and 

15 paragraph (2) of subsection (e), of section 521. 

16 The Internal Revenue Code of 1986 shall be applied 

17 as if such provisions and amendments had never 

18 been enacted. 

19 (2) SUNSET NOT TO APPLY.—Section 901 of 

20 the Economic Growth and Tax Relief Reconciliation 

21 Act of 2001 shall not apply to title V (other than 

22 subtitles F, G, and H thereof) of such Act. 

23 (3) REPEAL OF DEADWOOD.— 


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1 (A) Sections 2011, 2057, and 2604 of the 

2 Internal Revenue Code of 1986 are hereby re3 pealed. 

4 (B) The table of sections for part II of 

5 subchapter A of chapter 11 of such Code is 

6 amended by striking the item relating to section 

7 2011. 

8 (C) The table of sections for part IV of 

9 subchapter A of chapter 11 of such Code is 

10 amended by striking the item relating to section 

11 2057. 

12 (D) The table of sections for subchapter A 

13 of chapter 13 of such Code is amended by strik14 ing the item relating to section 2604. 

15 SEC. 4. UNIFIED CREDIT INCREASED BY UNUSED UNIFIED 

16 CREDIT OF DECEASED SPOUSE. 

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

18 the Internal Revenue Code of 1986 (defining applicable 

19 credit amount), as amended by section 3(b), is amended 

20 by striking paragraph (2) and inserting the following new 

21 paragraphs: 

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

23 purposes of this subsection, the applicable exclusion 

24 amount is the sum of— 

25 ‘‘(A) the basic exclusion amount, and 


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1 ‘‘(B) in the case of a surviving spouse, the 

2 aggregate deceased spousal unused exclusion 

3 amount. 

4 ‘‘(3) BASIC EXCLUSION AMOUNT.— 

5 ‘‘(A) IN GENERAL.—For purposes of this 

6 subsection, the basic exclusion amount is as fol7 lows: 

8 ‘‘(i) For calendar year 2010, 

9 $3,750,000. 

10 ‘‘(ii) For calendar year 2011, 

11 $4,000,000. 

12 ‘‘(iii) For calendar year 2012, 

13 $4,250,000. 

14 ‘‘(iv) For calendar year 2013, 

15 $4,500,000. 

16 ‘‘(v) For calendar year 2014, 

17 $4,750,000. 

18 ‘‘(vi) For calendar year 2015 and 

19 thereafter, $5,000,000. 

20 ‘‘(B) INFLATION ADJUSTMENT.—In the 

21 case of any decedent dying in a calendar year 

22 after 2015, the $5,000,000 amount in subpara23 graph (A)(vi) shall be increased by an amount 

24 equal to— 

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


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1 ‘‘(ii) the cost-of-living adjustment de2 termined under section 1(f)(3) for such 

3 calendar year by substituting ‘calendar 

4 year 2014’ for ‘calendar year 1992’ in sub5 paragraph (B) thereof. 

6 If any amount as adjusted under the preceding 

7 sentence is not a multiple of $50,000, such 

8 amount shall be rounded to the nearest multiple 

9 of $50,000. 

10 ‘‘(4) AGGREGATE DECEASED SPOUSAL UNUSED

11 EXCLUSION AMOUNT.—For purposes of this sub12 section, the term ‘aggregate deceased spousal unused 

13 exclusion amount’ means the lesser of— 

14 ‘‘(A) the basic exclusion amount, or 

15 ‘‘(B) the sum of the deceased spousal un16 used exclusion amounts of the surviving spouse. 

17 ‘‘(5) DECEASED SPOUSAL UNUSED EXCLUSION

18 AMOUNT.—For purposes of this subsection, the term 

19 ‘deceased spousal unused exclusion amount’ means, 

20 with respect to the surviving spouse of any deceased 

21 spouse dying after December 31, 2009, the excess (if 

22 any) of— 

23 ‘‘(A) the applicable exclusion amount of 

24 the deceased spouse, over 


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1 ‘‘(B) the amount with respect to which the 

2 tentative tax is determined under section 

3 2001(b)(1) on the estate of such deceased 

4 spouse. 

5 ‘‘(6) SPECIAL RULES.— 

6 ‘‘(A) ELECTION REQUIRED.—A deceased 

7 spousal unused exclusion amount may not be 

8 taken into account by a surviving spouse under 

9 paragraph (5) unless the executor of the estate 

10 of the deceased spouse files an estate tax return 

11 on which such amount is computed and makes 

12 an election on such return that such amount 

13 may be so taken into account. Such election, 

14 once made, shall be irrevocable. No election 

15 may be made under this subparagraph if such 

16 return is filed after the time prescribed by law 

17 (including extensions) for filing such return. 

18 ‘‘(B) EXAMINATION OF PRIOR RETURNS

19 AFTER EXPIRATION OF PERIOD OF LIMITATIONS

20 WITH RESPECT TO DECEASED SPOUSAL UN21 USED EXCLUSION AMOUNT.—Notwithstanding 

22 any period of limitation in section 6501, after 

23 the time has expired under section 6501 within 

24 which a tax may be assessed under chapter 11 

25 or 12 with respect to a deceased spousal unused 


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1 exclusion amount, the Secretary may examine a 

2 return of the deceased spouse to make deter3 minations with respect to such amount for pur4 poses of carrying out this subsection. 

5 ‘‘(7) REGULATIONS.—The Secretary shall pre6 scribe such regulations as may be necessary or ap7 propriate to carry out this subsection.’’. 

8 (b) CONFORMING AMENDMENTS.— 

9 (1) Paragraph (1) of section 2505(a), as 

10 amended by section 3, is amended to read as follows: 

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

12 2010(c) which would apply if the donor died as of 

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

14 (2) Section 2631(c) is amended by striking ‘‘the 

15 applicable exclusion amount’’ and inserting ‘‘the 

16 basic exclusion amount’’. 

17 (3) Section 6018(a)(1), after the application of 

18 section 101(g), is amended by striking ‘‘applicable 

19 exclusion amount’’ and inserting ‘‘basic exclusion 

20 amount’’. 

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

22 this section shall apply to estates of decedents dying, gen23 eration-skipping transfers, and gifts made, after Decem24 ber 31, 2009. 

Æ 


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