I 
114TH CONGRESS 
1ST SESSION H. R. 2907 
To amend the Internal Revenue Code of 1986 to reinstate estate and 
generation-skipping taxes, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 25, 2015 
Ms. SCHAKOWSKY (for herself and Mr. ELLISON) 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 reinstate 
estate and generation-skipping taxes, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Responsible Estate 
Tax Act’’. 
SEC. 2. MODIFICATIONS TO ESTATE, GIFT, AND GENERA-
TION-SKIPPING TRANSFER TAXES. 
(a) MODIFICATION OF RATES.— 
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(1) IN GENERAL.—Section 2001(c) of the Inter-
nal Revenue Code of 1986 is amended by striking 
the last 2 rows and inserting the following: 
‘‘Over $750,000 but not over $3,500,000 .............
$248,300 plus 39 per-
cent 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 ex-
cess 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 ex-
cess of such amount 
over $10,000,000. 
Over $50,000,000 ................................................
$24,245,800 plus 55 
percent of the ex-
cess of such amount 
over $50,000,000.’’. 
(2) SURTAX ON WEALTHY ESTATES.—Section 
2001(c) of such Code is amended— 
(A) by inserting before the table the fol-
lowing: 
‘‘(1) IN GENERAL.—’’, and 
(B) by adding at the end the following new 
paragraph: 
‘‘(2) SURTAX ON ESTATES OVER $500,000,000.— 
Notwithstanding paragraph (1), if the amount with 
respect to which the tentative tax to be computed is 
over $500,000,000, the rate of tax otherwise in ef-
fect under this subsection with respect to the 
amount in excess of $500,000,000 shall be increased 
by 10 percent.’’. 
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the basic exclusion amount (as defined under section 
2010(c)(3), as in effect for such period).’’. 
(B) GIFT
TAX
ADJUSTMENT.—Section 
2502 of such Code is amended by adding at the 
end the following new subsection: 
‘‘(d) ADJUSTMENT TO REFLECT CHANGES IN EX-
CLUSION AMOUNT.— 
‘‘(1) IN GENERAL.—If the taxpayer made a tax-
able gift in an applicable preceding calendar period, 
the amount of tax computed under subsection (a) 
shall be reduced by the amount of tax which would 
have been payable under chapter 12 for such appli-
cable preceding calendar period if the applicable ex-
clusion amount in effect for such preceding calendar 
period had been the applicable exclusion amount in 
effect for the calendar year for which the tax is 
being computed and the modifications described in 
subsection (g) had been applicable for such pre-
ceding calendar period. 
‘‘(2) LIMITATION.—The aggregate amount of 
gifts made in any applicable preceding calendar pe-
riod to which the reduction under paragraph (1) ap-
plies shall not exceed the excess of— 
‘‘(A) the applicable exclusion amount for 
such preceding calendar period, over 
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‘‘(B) the applicable exclusion amount for 
the calendar year for which the tax is being 
computed. 
‘‘(3) APPLICABLE PRECEDING CALENDAR YEAR 
PERIOD.—The term ‘applicable preceding calendar 
year period’ means any preceding calendar year pe-
riod in which the applicable exclusion amount ex-
ceeded the applicable exclusion amount for the cal-
endar year for which the tax is being computed. 
‘‘(4) APPLICABLE
EXCLUSION
AMOUNT.—The 
term ‘applicable exclusion amount’ means, with re-
spect to any period, the amount determined under 
section 2010(c) for such period, except that in the 
case of any period for which such amount includes 
the deceased spousal unused exclusion amount (as 
defined in section 2010(c)(4)), such term shall mean 
the basic exclusion amount (as defined under section 
2010(c)(3), as in effect for such period).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to estates of decedents dying, and 
generation-skipping transfers and gifts made, after De-
cember 31, 2015. 
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SEC. 3. MODIFICATION OF RULES FOR VALUE OF CERTAIN 
FARM, ETC., REAL PROPERTY. 
(a) IN GENERAL.—Section 2032A(a)(2) of the Inter-
nal Revenue Code of 1986 is amended by striking 
‘‘$750,000’’ and inserting ‘‘$3,000,000’’. 
(b) INFLATION ADJUSTMENT.—Section 2032A(a)(3) 
of such Code is amended— 
(1) by striking ‘‘1998’’ and inserting ‘‘2015’’, 
(2) by striking ‘‘$750,000’’ and inserting 
‘‘$3,000,000’’ in subparagraph (A), and 
(3) by striking ‘‘calendar year 1997’’ and in-
serting ‘‘calendar year 2014’’ in subparagraph (B). 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to estates of decedents dying, and 
gifts made, after December 31, 2015. 
SEC. 4. MODIFICATION OF ESTATE TAX RULES WITH RE-
SPECT TO LAND SUBJECT TO CONSERVATION 
EASEMENTS. 
(a) MODIFICATION OF EXCLUSION LIMITATION.— 
Section 2031(c)(1) of the Internal Revenue Code of 1986 
is amended by striking all that follows subparagraph (A) 
and inserting the following: 
‘‘(B) $2,000,000.’’. 
(b) MODIFICATION OF APPLICABLE PERCENTAGE.— 
Section 2031(c)(2) of such Code is amended by striking 
‘‘40 percent’’ and inserting ‘‘60 percent’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to estates of decedents dying, and 
gifts made, after December 31, 2015. 
SEC. 5. CONSISTENT BASIS REPORTING BETWEEN ESTATE 
AND PERSON ACQUIRING PROPERTY FROM 
DECEDENT. 
(a) CONSISTENT USE OF BASIS.— 
(1) PROPERTY
ACQUIRED
FROM
A
DECE-
DENT.—Section 1014 of the Internal Revenue Code 
of 1986 is amended by adding at the end the fol-
lowing new subsection: 
‘‘(f) BASIS MUST BE CONSISTENT WITH ESTATE 
TAX RETURN.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the value used to determine the basis of any in-
terest in property in the hands of the person acquir-
ing such property shall not exceed the value of such 
interest as finally determined for purposes of chap-
ter 11. 
‘‘(2) SPECIAL RULE WHERE NO FINAL DETER-
MINATION.—In any case in which the final value of 
property has not been determined under chapter 11 
and there has been a statement furnished under sec-
tion 6035(a), the value used to determine the basis 
of any interest in property in the hands of the per-
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son acquiring such property shall not exceed the 
amount reported on any statement furnished under 
section 6035(a). 
‘‘(3) REGULATIONS.—The Secretary may by 
regulations provide exceptions to the application of 
this subsection.’’. 
(2) PROPERTY
ACQUIRED
BY
GIFTS
AND 
TRANSFERS IN TRUST.—Section 1015 of such Code 
is amended by adding at the end the following new 
subsection: 
‘‘(f) BASIS MUST BE CONSISTENT GIFT TAX RE-
TURN.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the value used to determine the basis of any in-
terest in property in the hands of the person acquir-
ing such property shall not exceed the value of such 
interest as finally determined for purposes of chap-
ter 12. 
‘‘(2) SPECIAL RULE WHERE NO FINAL DETER-
MINATION.—In any case in which the final value of 
property has not been determined under chapter 12 
and there has been a statement furnished under sec-
tion 6035(b), the value used to determine the basis 
of any interest in property in the hands of the per-
son acquiring such property shall not exceed the 
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amount reported on any statement furnished under 
section 6035(b). 
‘‘(3) REGULATIONS.—The Secretary may by 
regulations provide exceptions to the application of 
this subsection.’’. 
(b) INFORMATION REPORTING.— 
(1) IN GENERAL.—Subpart A of part III of 
subchapter A of chapter 61 of such Code is amended 
by inserting after section 6034A the following new 
section: 
‘‘SEC. 6035. BASIS INFORMATION TO PERSONS ACQUIRING 
PROPERTY FROM DECEDENT OR BY GIFT. 
‘‘(a) INFORMATION WITH RESPECT TO PROPERTY 
ACQUIRED FROM DECEDENTS.— 
‘‘(1) IN GENERAL.—The executor of any estate 
required to file a return under section 6018(a) shall 
furnish to the Secretary and to each person acquir-
ing any interest in property included in the dece-
dent’s gross estate for Federal estate tax purposes 
a statement identifying the value of each interest in 
such property as reported on such return and such 
other information with respect to such interest as 
the Secretary may prescribe. 
‘‘(2) STATEMENTS
BY
BENEFICIARIES.—Each 
person required to file a return under section 
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6018(b) shall furnish to the Secretary and to each 
other person who holds a legal or beneficial interest 
in the property to which such return relates a state-
ment identifying the information described in para-
graph (1). 
‘‘(3) TIME FOR FURNISHING STATEMENT.— 
‘‘(A) IN
GENERAL.—Each statement re-
quired to be furnished under paragraph (1) or 
(2) shall be furnished at such time as the Sec-
retary may prescribe, but in no case at a time 
later than the earlier of— 
‘‘(i) the date which is 30 days after 
the date on which the return under section 
6018 was required to be filed (including 
extensions, if any), or 
‘‘(ii) the date which is 30 days after 
the date such return is filed. 
‘‘(B) ADJUSTMENTS.—In any case in 
which there is an adjustment to the information 
required to be included on a statement filed 
under paragraph (1) or (2) after such state-
ment has been filed, a supplemental statement 
under such paragraph shall be filed not later 
than the date which is 30 days after such ad-
justment is made. 
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‘‘(b) INFORMATION WITH RESPECT TO PROPERTY 
ACQUIRED BY GIFT.— 
‘‘(1) IN
GENERAL.—Each person making a 
transfer by gift who is required to file a return 
under section 6019 with respect to such transfer 
shall furnish to the Secretary and to each person ac-
quiring any interest in property by reason of such 
transfer a statement identifying the value of each in-
terest in such property as reported on such return 
and such other information with respect to such in-
terest as the Secretary may prescribe. 
‘‘(2) TIME FOR FURNISHING STATEMENT.— 
‘‘(A) IN
GENERAL.—Each statement re-
quired to be furnished under paragraph (1) 
shall be furnished at such time as the Secretary 
may prescribe, but in no case at a time later 
than the earlier of— 
‘‘(i) the date which is 30 days after 
the date on which the return under section 
6019 was required to be filed (including 
extensions, if any), or 
‘‘(ii) the date which is 30 days after 
the date such return is filed. 
‘‘(B) ADJUSTMENTS.—In any case in 
which there is an adjustment to the information 
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required to be included on a statement filed 
under paragraph (1) after such statement has 
been filed, a supplemental statement under 
such paragraph shall be filed not later than the 
date which is 30 days after such adjustment is 
made. 
‘‘(c) REGULATIONS.—The Secretary shall prescribe 
such regulations as necessary to carry out this section, in-
cluding regulations relating to— 
‘‘(1) the application of this section to property 
with regard to which no estate or gift tax return is 
required to be filed, and 
‘‘(2) situations in which the surviving joint ten-
ant or other recipient may have better information 
than the executor regarding the basis or fair market 
value of the property.’’. 
(2) PENALTY FOR FAILURE TO FILE.— 
(A) RETURN.—Section 6724(d)(1) of such 
Code is amended by striking ‘‘and’’ at the end 
of subparagraph (B), by striking the period at 
the end of subparagraph (C) and inserting ‘‘, 
and’’, and by inserting after subparagraph (C) 
the following new subparagraph: 
‘‘(D) any statement required to be filed 
with the Secretary under section 6035.’’. 
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(B) STATEMENT.—Section 6724(d)(2) of 
such Code is amended by striking ‘‘or’’ at the 
end of subparagraph (GG), by striking the pe-
riod at the end of subparagraph (HH) and in-
serting ‘‘, or’’, and by inserting after subpara-
graph (HH) the following new subparagraph: 
‘‘(II) section 6035 (other than a statement 
described in paragraph (1)(D)).’’. 
(3) CLERICAL AMENDMENT.—The table of sec-
tions for subpart A of part III of subchapter A of 
chapter 61 of such Code is amended by inserting 
after the item relating to section 6034A the fol-
lowing new item: 
‘‘Sec. 6035. Basis information to persons acquiring property from decedent or 
by gift.’’. 
(c) PENALTY FOR INCONSISTENT REPORTING.— 
(1) IN
GENERAL.—Section 6662(b) of such 
Code is amended by inserting after paragraph (7) 
the following new paragraph: 
‘‘(8) Any inconsistent estate or gift basis.’’. 
(2) INCONSISTENT BASIS REPORTING.—Section 
6662 of such Code is amended by adding at the end 
the following new subsection: 
‘‘(k) INCONSISTENT ESTATE OR GIFT BASIS RE-
PORTING.—For purposes of this section, the term ‘incon-
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sistent estate or gift basis’ means the portion of the under-
statement which is attributable to— 
‘‘(1) in the case of property acquired from a de-
cedent, a basis determination with respect to such 
property which is not consistent with the value of 
such property as determined under section 1014(f), 
and 
‘‘(2) in the case of property acquired by gift, a 
basis determination with respect to such property 
which is not consistent with the value of such prop-
erty as determined under section 1015(f).’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to transfers for which returns are 
filed after the date of the enactment of this Act. 
SEC. 6. VALUATION RULES FOR CERTAIN TRANSFERS OF 
NONBUSINESS ASSETS; LIMITATION ON MI-
NORITY DISCOUNTS. 
(a) IN GENERAL.—Section 2031 of the Internal Rev-
enue Code of 1986 is amended by redesignating subsection 
(d) as subsection (f) and by inserting after subsection (c) 
the following new subsections: 
‘‘(d) VALUATION RULES FOR CERTAIN TRANSFERS 
OF NONBUSINESS ASSETS.—For purposes of this chapter 
and chapter 12— 
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‘‘(1) IN GENERAL.—In the case of the transfer 
of any interest in an entity other than an interest 
which is actively traded (within the meaning of sec-
tion 1092)— 
‘‘(A) the value of any nonbusiness assets 
held by the entity with respect to such interest 
shall be determined as if the transferor had 
transferred such assets directly to the trans-
feree (and no valuation discount shall be al-
lowed with respect to such nonbusiness assets), 
and 
‘‘(B) such nonbusiness assets shall not be 
taken into account in determining the value of 
the interest in the entity. 
‘‘(2) NONBUSINESS ASSETS.—For purposes of 
this subsection— 
‘‘(A) IN
GENERAL.—The term ‘nonbusi-
ness asset’ means any asset which is not used 
in the active conduct of 1 or more trades or 
businesses. 
‘‘(B) EXCEPTION
FOR
CERTAIN
PASSIVE 
ASSETS.—Except as provided in subparagraph 
(C), a passive asset shall not be treated for pur-
poses of subparagraph (A) as used in the active 
conduct of a trade or business unless— 
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‘‘(i) the asset is property described in 
paragraph (1) or (4) of section 1221(a) or 
is a hedge with respect to such property, 
or 
‘‘(ii) the asset is real property used in 
the active conduct of 1 or more real prop-
erty trades or businesses (within the mean-
ing of section 469(c)(7)(C)) in which the 
transferor materially participates and with 
respect to which the transferor meets the 
requirements of section 469(c)(7)(B)(ii). 
For purposes of clause (ii), material participa-
tion shall be determined under the rules of sec-
tion 469(h), except that section 469(h)(3) shall 
be applied without regard to the limitation to 
farming activity. 
‘‘(C) EXCEPTION
FOR
WORKING
CAP-
ITAL.—Any asset (including a passive asset) 
which is held as a part of the reasonably re-
quired working capital needs of a trade or busi-
ness shall be treated as used in the active con-
duct of a trade or business. 
‘‘(3) PASSIVE
ASSET.—For purposes of this 
subsection, the term ‘passive asset’ means any— 
‘‘(A) cash or cash equivalents, 
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‘‘(B) except to the extent provided by the 
Secretary, stock in a corporation or any other 
equity, profits, or capital interest in any entity, 
‘‘(C) evidence of indebtedness, option, for-
ward or futures contract, notional principal con-
tract, or derivative, 
‘‘(D) asset described in clause (iii), (iv), or 
(v) of section 351(e)(1)(B), 
‘‘(E) annuity, 
‘‘(F) real property used in 1 or more real 
property trades or businesses (as defined in sec-
tion 469(c)(7)(C)), 
‘‘(G) asset (other than a patent, trade-
mark, or copyright) which produces royalty in-
come, 
‘‘(H) commodity, 
‘‘(I) collectible (within the meaning of sec-
tion 401(m)), or 
‘‘(J) any other asset specified in regula-
tions prescribed by the Secretary. 
‘‘(4) LOOK-THRU RULES.— 
‘‘(A) IN GENERAL.—If a nonbusiness asset 
of an entity consists of a 10-percent interest in 
any other entity, this subsection shall be ap-
plied by disregarding the 10-percent interest 
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and by treating the entity as holding directly its 
ratable share of the assets of the other entity. 
This subparagraph shall be applied successively 
to any 10-percent interest of such other entity 
in any other entity. 
‘‘(B) 10-PERCENT
INTEREST.—The term 
‘10-percent interest’ means— 
‘‘(i) in the case of an interest in a cor-
poration, ownership of at least 10 percent 
(by vote or value) of the stock in such cor-
poration, 
‘‘(ii) in the case of an interest in a 
partnership, ownership of at least 10 per-
cent of the capital or profits interest in the 
partnership, and 
‘‘(iii) in any other case, ownership of 
at least 10 percent of the beneficial inter-
ests in the entity. 
‘‘(5) COORDINATION WITH SUBSECTION (b).— 
Subsection (b) shall apply after the application of 
this subsection. 
‘‘(e) LIMITATION ON MINORITY DISCOUNTS.—For 
purposes of this chapter and chapter 12, in the case of 
the transfer of any interest in an entity other than an in-
terest which is actively traded (within the meaning of sec-
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tion 1092), no discount shall be allowed by reason of the 
fact that the transferee does not have control of such enti-
ty if the transferor, the transferee, and members of the 
family (as defined in section 2032A(e)(2)) of the trans-
feror and transferee— 
‘‘(1) have control of such entity, or 
‘‘(2) own the majority of the ownership inter-
ests (by value) in such entity.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to transfers after the date of the 
enactment of this Act. 
SEC. 7. REQUIRED MINIMUM 10-YEAR TERM, ETC., FOR 
GRANTOR RETAINED ANNUITY TRUSTS. 
(a) IN GENERAL.—Section 2702(b) of the Internal 
Revenue Code of 1986 is amended— 
(1) by redesignating paragraphs (1), (2), and 
(3) as subparagraphs (A), (B), and (C), respectively, 
and by moving such subparagraphs (as so redesig-
nated) 2 ems to the right; 
(2) by striking ‘‘For purposes of’’ and inserting 
the following: 
‘‘(1) IN GENERAL.—For purposes of’’; 
(3) by striking ‘‘paragraph (1) or (2)’’ in para-
graph (1)(C) (as so redesignated) and inserting 
‘‘subparagraph (A) or (B)’’; and 
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(4) by adding at the end the following new 
paragraph: 
‘‘(2) ADDITIONAL
REQUIREMENTS
WITH
RE-
SPECT
TO
GRANTOR
RETAINED
ANNUITIES.—For 
purposes of subsection (a), in the case of an interest 
described in paragraph (1)(A) (determined without 
regard to this paragraph) which is retained by the 
transferor, such interest shall be treated as de-
scribed in such paragraph only if— 
‘‘(A) the right to receive the fixed amounts 
referred to in such paragraph is for a term of 
not less than 10 years, 
‘‘(B) such fixed amounts, when determined 
on an annual basis, do not decrease relative to 
any prior year during the first 10 years of the 
term referred to in subparagraph (A), and 
‘‘(C) the remainder interest has a value 
equal to or greater than 10 percent of the value 
of the assets transferred to the trust, deter-
mined as of the time of the transfer.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to transfers made after the date 
of the enactment of this Act. 
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SEC. 8. CERTAIN TRANSFER TAX RULES APPLICABLE TO 
GRANTOR TRUSTS. 
(a) IN GENERAL.—Subtitle B of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new chapter: 
‘‘CHAPTER 16—SPECIAL RULES FOR 
GRANTOR TRUSTS 
‘‘Sec. 2901. Application of transfer taxes. 
‘‘SEC. 2901. APPLICATION OF TRANSFER TAXES. 
‘‘(a) IN GENERAL.—In the case of any portion of a 
trust to which this section applies— 
‘‘(1) the value of the gross estate of the de-
ceased deemed owner of such portion shall include 
all assets attributable to that portion at the time of 
the death of such owner, 
‘‘(2) any distribution from such portion to one 
or more beneficiaries during the life of the deemed 
owner of such portion shall be treated as a transfer 
by gift for purposes of chapter 12, and 
‘‘(3) if at any time during the life of the 
deemed owner of such portion, such owner ceases to 
be treated as the owner of such portion under sub-
part E of part 1 of subchapter J of chapter 1, all 
assets attributable to such portion at such time shall 
be treated for purposes of chapter 12 as a transfer 
by gift made by the deemed owner. 
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‘‘(b) PORTION OF TRUST TO WHICH SECTION AP-
PLIES.—This section shall apply to— 
‘‘(1) the portion of a trust with respect to 
which the grantor is the deemed owner, and 
‘‘(2) the portion of the trust to which a person 
who is not the grantor is a deemed owner by reason 
of the rules of subpart E of part 1 of subchapter J 
of chapter 1, and such deemed owner engages in a 
sale, exchange, or comparable transaction with the 
trust that is disregarded for purposes of subtitle A. 
For purposes of paragraph (2), the portion of the trust 
described with respect to a transaction is the portion of 
the trust attributable to the property received by the trust 
in such transaction, including all retained income there-
from, appreciation thereon, and reinvestments thereof, net 
of the amount of consideration received by the deemed 
owner in such transaction. 
‘‘(c) EXCEPTIONS.—This section shall not apply to— 
‘‘(1) any trust that is includible in the gross es-
tate of the deemed owner (without regard to sub-
section (a)(1)), and 
‘‘(2) any other type of trust that the Secretary 
determines by regulations or other guidance does not 
have as a significant purpose the avoidance of trans-
fer taxes. 
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‘‘(d) DEEMED OWNER DEFINED.—For purposes of 
this section, the term ‘deemed owner’ means any person 
who is treated as the owner of a portion of a trust under 
subpart E of part 1 of subchapter J of chapter 1. 
‘‘(e) REDUCTION FOR TAXABLE GIFTS TO TRUST 
MADE BY OWNER.—The amount to which subsection (a) 
applies shall be reduced by the value of any transfer by 
gift by the deemed owner to the trust previously taken 
into account by the deemed owner under chapter 12. 
‘‘(f) LIABILITY FOR PAYMENT OF TAX.—Any tax im-
posed pursuant to subsection (a) shall be a liability of the 
trust.’’. 
(b) CLERICAL AMENDMENT.—The table of chapters 
for subtitle B of such Code is amended by adding at the 
end the following new item: 
‘‘CHAPTER 16. SPECIAL RULES FOR GRANTOR TRUSTS’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply— 
(1) to trusts created on or after the date of the 
enactment of this Act, 
(2) to any portion of a trust established before 
the date of the enactment of this Act which is attrib-
utable to a contribution made on or after such date, 
and 
(3) to any portion of a trust established before 
the date of the enactment of this Act to which sec-
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