II 

111TH CONGRESS 

1ST SESSION S. 2784 

To amend the Internal Revenue Code of 1986 to permanently extend the 

estate tax as in effect in 2009, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 17, 2009 

Mr. CARPER (for himself and Mr. VOINOVICH) 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 permanently 

extend the estate tax as in effect in 2009, 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. PERMANENT EXTENSION OF ESTATE TAX AS IN 

4 EFFECT IN 2009. 

5 (a) RESTORATION OF UNIFIED CREDIT AGAINST

6 GIFT TAX.—Paragraph (1) of section 2505(a) (relating 

7 to general rule for unified credit against gift tax), after 

8 the application of subsection (f), is amended by striking 

9 ‘‘(determined as if the applicable exclusion amount were 

10 $1,000,000)’’. 


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1 (b) EXCLUSION EQUIVALENT OF UNIFIED CREDIT

2 EQUAL TO $3,500,000.—Subsection (c) of section 2010 

3 of the Internal Revenue Code of 1986 (relating to unified 

4 credit against estate tax) is amended to read as follows: 

5 ‘‘(c) APPLICABLE CREDIT AMOUNT.— 

6 ‘‘(1) IN GENERAL.—For purposes of this sec7 tion, the applicable credit amount is the amount of 

8 the tentative tax which would be determined under 

9 section 2001(c) if the amount with respect to which 

10 such tentative tax is to be computed were equal to 

11 the applicable exclusion amount. 

12 ‘‘(2) APPLICABLE EXCLUSION AMOUNT.— 

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

14 subsection, the applicable exclusion amount is 

15 $3,500,000. 

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

17 case of any decedent dying in a calendar year 

18 after 2010, the dollar amount in subparagraph 

19 (A) shall be increased by an amount equal to— 

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

21 ‘‘(ii) the cost-of-living adjustment de22 termined under section 1(f)(3) for such 

23 calendar year by substituting ‘calendar 

24 year 2009’ for ‘calendar year 1992’ in sub25 paragraph (B) thereof. 


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1 If any amount as adjusted under the preceding 

2 sentence is not a multiple of $10,000, such 

3 amount shall be rounded to the nearest multiple 

4 of $10,000.’’. 

5 (c) MAXIMUM ESTATE TAX RATE EQUAL TO 45 PER6 CENT.— 

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

8 2001 of the Internal Revenue Code of 1986 (relating 

9 to imposition and rate of tax) is amended— 

10 (A) by striking ‘‘but not over $2,000,000’’ 

11 in the table contained in paragraph (1), 

12 (B) by striking the last 2 items in such 

13 table, 

14 (C) by striking ‘‘(1) IN GENERAL.—’’, and 

15 (D) by striking paragraph (2). 

16 (2) CONFORMING AMENDMENT.—Paragraphs 

17 (1) and (2) of section 2102(b) of such Code are 

18 amended to read as follows: 

19 ‘‘(1) IN GENERAL.—A credit in an amount that 

20 would be determined under section 2010 as the ap21 plicable credit amount if the applicable exclusion 

22 amount were $60,000 shall be allowed against the 

23 tax imposed by section 2101. 

24 ‘‘(2) RESIDENTS OF POSSESSIONS OF THE

25 UNITED STATES.—In the case of a decedent who is 


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1 considered to be a ‘nonresident not a citizen of the 

2 United States’ under section 2209, the credit al3 lowed under this subsection shall not be less than 

4 the proportion of the amount that would be deter5 mined under section 2010 as the applicable credit 

6 amount if the applicable exclusion amount were 

7 $175,000 which the value of that part of the dece8 dent’s gross estate which at the time of the dece9 dent’s death is situated in the United States bears 

10 to the value of the decedent’s entire gross estate, 

11 wherever situated.’’. 

12 (d) MODIFICATIONS OF ESTATE AND GIFT TAXES TO

13 REFLECT DIFFERENCES IN UNIFIED CREDIT RESULTING

14 FROM DIFFERENT TAX RATES.— 

15 (1) ESTATE TAX.— 

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

17 the Internal Revenue Code of 1986 (relating to 

18 computation of tax) is amended by striking ‘‘if 

19 the provisions of subsection (c) (as in effect at 

20 the decedent’s death)’’ and inserting ‘‘if the 

21 modifications described in subsection (g)’’. 

22 (B) MODIFICATIONS.—Section 2001 of 

23 such Code is amended by adding at the end the 

24 following new subsection: 


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1 ‘‘(g) MODIFICATIONS TO GIFT TAX PAYABLE TO RE2 FLECT DIFFERENT TAX RATES.—For purposes of apply3 ing subsection (b)(2) with respect to 1 or more gifts, the 

4 rates of tax under subsection (c) in effect at the decedent’s 

5 death shall, in lieu of the rates of tax in effect at the time 

6 of such gifts, be used both to compute— 

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

8 to such gifts, and 

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

10 section 2505, including in computing— 

11 ‘‘(A) the applicable credit amount under 

12 section 2505(a)(1), and 

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

14 credit for all preceding periods under section 

15 2505(a)(2). 

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

17 credit amount for any calendar year before 1998 is 

18 the amount which would be determined under sec19 tion 2010(c) if the applicable exclusion amount were 

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

21 year.’’. 

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

23 (relating to unified credit against gift tax) is amend24 ed by adding at the end the following new flush sen25 tence: 


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

2 year, the rates of tax in effect under section 2502(a)(2) 

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

4 in effect for preceding calendar periods, be used in deter5 mining the amounts allowable as a credit under this sec6 tion for all preceding calendar periods.’’. 

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

8 this section shall apply to estates of decedents dying, gen9 eration-skipping transfers, and gifts made, after Decem10 ber 31, 2009. 

11 (f) ADDITIONAL MODIFICATIONS TO ESTATE TAX.— 

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

13 the Economic Growth and Tax Relief Reconciliation 

14 Act of 2001, and the amendments made by such 

15 provisions, are hereby repealed: 

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

17 (B) Subsection (d), and so much of sub18 section (f)(3) as relates to subsection (d), of 

19 section 511. 

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

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

22 The Internal Revenue Code of 1986 shall be applied 

23 as if such provisions and amendments had never 

24 been enacted. 

25 (2) SUNSET NOT TO APPLY.— 


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1 (A) Subsection (a) of section 901 of the 

2 Economic Growth and Tax Relief Reconciliation 

3 Act of 2001 is amended by striking ‘‘this Act’’ 

4 and all that follows and inserting ‘‘this Act 

5 (other than title V) shall not apply to taxable, 

6 plan, or limitation years beginning after Decem7 ber 31, 2010.’’. 

8 (B) Subsection (b) of such section 901 is 

9 amended by striking ‘‘, estates, gifts, and trans10 fers’’. 

11 (3) REPEAL OF DEADWOOD.— 

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

13 Internal Revenue Code of 1986 are hereby re14 pealed. 

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

16 subchapter A of chapter 11 of such Code is 

17 amended by striking the item relating to section 

18 2011. 

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

20 subchapter A of chapter 11 of such Code is 

21 amended by striking the item relating to section 

22 2057. 

23 (D) The table of sections for subchapter A 

24 of chapter 13 of such Code is amended by strik25 ing the item relating to section 2604. 


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1 SEC. 2. UNIFIED CREDIT INCREASED BY UNUSED UNIFIED 

2 CREDIT OF DECEASED SPOUSE. 

3 (a) IN GENERAL.—Section 2010(c) of the Internal 

4 Revenue Code of 1986, as amended by section 1(b), is 

5 amended by striking paragraph (2) and inserting the fol6 lowing new paragraphs: 

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

8 purposes of this subsection, the applicable exclusion 

9 amount is the sum of— 

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

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

12 aggregate deceased spousal unused exclusion 

13 amount. 

14 ‘‘(3) BASIC EXCLUSION AMOUNT.— 

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

16 subsection, the basic exclusion amount is 

17 $3,500,000. 

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

19 case of any decedent dying in a calendar year 

20 after 2010, the dollar amount in subparagraph 

21 (A) shall be increased by an amount equal to— 

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

23 ‘‘(ii) the cost-of-living adjustment de24 termined under section 1(f)(3) for such 

25 calendar year by substituting ‘calendar 


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1 year 2009’ for ‘calendar year 1992’ in sub2 paragraph (B) thereof. 

3 If any amount as adjusted under the preceding 

4 sentence is not a multiple of $10,000, such 

5 amount shall be rounded to the nearest multiple 

6 of $10,000. 

7 ‘‘(4) AGGREGATE DECEASED SPOUSAL UNUSED

8 EXCLUSION AMOUNT.—For purposes of this sub9 section, the term ‘aggregate deceased spousal unused 

10 exclusion amount’ means the lesser of— 

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

12 ‘‘(B) the sum of the deceased spousal un13 used exclusion amounts computed with respect 

14 to each deceased spouse of the surviving spouse. 

15 ‘‘(5) DECEASED SPOUSAL UNUSED EXCLUSION

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

17 ‘deceased spousal unused exclusion amount’ means, 

18 with respect to the surviving spouse of any deceased 

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

20 any) of— 

21 ‘‘(A) the basic exclusion amount of the de22 ceased spouse, over 

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

24 tentative tax is determined under section 


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

2 spouse. 

3 ‘‘(6) SPECIAL RULES.— 

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

5 spousal unused exclusion amount may not be 

6 taken into account by a surviving spouse under 

7 paragraph (5) unless the executor of the estate 

8 of the deceased spouse files an estate tax return 

9 on which such amount is computed and makes 

10 an election on such return that such amount 

11 may be so taken into account. Such election, 

12 once made, shall be irrevocable. No election 

13 may be made under this subparagraph if such 

14 return is filed after the time prescribed by law 

15 (including extensions) for filing such return. 

16 ‘‘(B) EXAMINATION OF PRIOR RETURNS

17 AFTER EXPIRATION OF PERIOD OF LIMITATIONS

18 WITH RESPECT TO DECEASED SPOUSAL UN19 USED EXCLUSION AMOUNT.—Notwithstanding 

20 any period of limitation in section 6501, after 

21 the time has expired under section 6501 within 

22 which a tax may be assessed under chapter 11 

23 or 12 with respect to a deceased spousal unused 

24 exclusion amount, the Secretary may examine a 

25 return of the deceased spouse to make deterVerDate Nov 24 2008 22:53 Nov 17, 2009 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2784.IS S2784

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1 minations with respect to such amount for pur2 poses of carrying out this subsection. 

3 ‘‘(7) REGULATIONS.—The Secretary shall pre4 scribe such regulations as may be necessary or ap5 propriate to carry out this subsection.’’. 

6 (b) CONFORMING AMENDMENTS.— 

7 (1) Paragraph (1) of section 2505(a) of the In8 ternal Revenue Code of 1986, as amended by section 

9 1(a), is amended to read as follows: 

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

11 under section 2010(c) which would apply if the 

12 donor died as of the end of the calendar year, re13 duced by’’. 

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

15 striking ‘‘the applicable exclusion amount’’ and in16 serting ‘‘the basic exclusion amount’’. 

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

18 by striking ‘‘applicable exclusion amount’’ and in19 serting ‘‘basic exclusion amount’’. 

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

21 this section shall apply to estates of decedents dying, gen22 eration-skipping transfers, and gifts made, after Decem23 ber 31, 2009. 


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1 SEC. 3. SENSE OF THE SENATE REGARDING REVENUE NEU2 TRALITY. 

3 It is the sense of the Senate that any reduction in 

4 Federal revenues resulting from the provisions of, and 

5 amendments made by, this Act should be fully offset. 

Æ 


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