Sensible Estate Tax Act of 2016

To amend the Internal Revenue Code of 1986 to return the estate, gift, and generation skipping transfer tax to 2009 levels. 1. Short title This Act may be cited as the Sensible Estate Tax Act of 2016 2. Estate and gift tax returned to 2009 levels (a) Estate tax (1) Rate Schedule Subsection (c) of section 2001 (c) Rate Schedule If the amount with respect to which the tentative tax to be computed is: The tentative tax is: Not over $10,000 18% of such amount. Over $10,000 but not over $20,000 $1,800, plus 20 percent of the excess of such amount over $10,000. Over $20,000 but not over $40,000 $3,800, plus 22% of the excess of such amount over $20,000. Over $40,000 but not over $60,000 $8,200, plus 24% of the excess of such amount over $40,000. Over $60,000 but not over $80,000 $13,000, plus 26% of the excess of such amount over $60,000. Over $80,000 but not over $100,000 $18,200, plus 28% of the excess of such amount over $80,000. Over $100,000 but not over $150,000 $23,800, plus 30% of the excess of such amount over $100,000. Over $150,000 but not over $250,000 $38,800, plus 32% of the excess of such amount over $150,000. Over $250,000 but not over $500,000 $70,800, plus 34% of the excess of such amount over $250,000. Over $500,000 but not over $750,000 $155,800, plus 37% of the excess of such amount over $500,000. Over $750,000 but not over $1,000,000 $248,300, plus 39% of the excess of such amount over $750,000. Over $1,000,000 but not over $1,250,000 $345,800, plus 41% of the excess of such amount over $1,000,000. Over $1,250,000 but not over $1,500,000 $448,300, plus 43% of the excess of such amount over $1,250,000. Over $1,500,000 $555,800, plus 45% of the excess of such amount over $1,500,000. . (2) Exemption Amount Paragraph (3) of section 2010(c) of such Code is amended to read as follows: (3) Basic exclusion amount For purposes of this subsection, the basic exclusion amount is $3,500,000. . (b) Gift tax (1) Limitation on basic exclusion amount for purposes of determining applicable credit amount Paragraph (1) of section 2505(a) (determined as if the basic exclusion amount were $1,000,000 and the deceased spousal unused exclusion amount was modified under subsection (d)) calendar year (2) Modification of deceased spousal unused exclusion amount Section 2505 of such Code is amended by adding at the end the following: (d) Modification of deceased spousal unused exclusion amount In the case of a surviving spouse who is the last spouse of the decedent with respect to whom an election is made under section 2010(c)(5), the deceased spousal unused exclusion amount with respect to such surviving spouse shall be determined as if such amount were the lesser of— (1) $1,000,000, and (2) applicable exclusion amount of the decedent reduced by the amount with respect to which the tentative tax is determined under section 2001(b)(1) on the estate of the decedent. . (c) Effective date The amendments made by this section shall apply to estates of decedents dying and gifts made after December 31, 2016.

Summary: Sensible Estate Tax Act of 2016 This bill amends the Internal Revenue Code to modify the estate and gift taxes. For the estate tax, the bill increases the rates and decreases the amount that is excluded from the tax. For the gift tax, the bill establishes a separate lifetime exclusion amount. (Under current law, the estate and gift taxes share a unified exclusion amount.)