‘‘(A) the product of the rate specified in 
section 1(h)(1)(C) in effect on the date of the 
decedent’s death multiplied by so much of the 
sum described in subsection (b)(1) as does not 
exceed $25,000,000, and 
‘‘(B) the applicable percentage effective on 
the date of the decedent’s death of so much of 
the sum described in subsection (b)(1) as ex-
ceeds $25,000,000. 
‘‘(2) APPLICABLE PERCENTAGE.—For purposes 
of paragraph (1)(B), the applicable percentage is—
‘‘(A) in the case the decedent’s death is in 
2010, 40 percent, 
‘‘(B) in the case the decedent’s death is in 
2011, 38 percent, 
‘‘(C) in the case the decedent’s death is in 
2012, 36 percent, 
‘‘(D) in the case the decedent’s death is in 
2013, 34 percent, 
‘‘(E) in the case the decedent’s death is in 
2014, 32 percent, and 
‘‘(F) in the case the decedent’s death is in 
2015 or thereafter, 30 percent. 
‘‘(3) INFLATION ADJUSTMENT.—In the case of 
any decedent dying in a calendar year after 2015,
each $25,000,000 amount in subparagraphs (A) and 
(B) of paragraph (1) shall be increased by an 
amount equal to—
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for such calendar 
year by substituting ‘calendar year 2014’ for 
‘calendar year 1992’ in subparagraph (B) 
thereof. 
If any amount as adjusted under the preceding sen-
tence is not a multiple of $100,000, such amount 
shall be rounded to the nearest multiple of 
$100,000.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
2502(a) (relating to computation of tax), after the 
application of subsection (g), is amended by adding 
at the end the following flush sentence: 
‘‘In computing the tentative tax under section 2001(c) for 
purposes of this subsection, ‘the last day of the calendar 
year in which the gift was made’ shall be substituted for 
‘the date of the decedent’s death’ each place it appears 
in such section.’’. 
(d) MODIFICATIONS OF ESTATE AND GIFT TAXES TO 
REFLECT DIFFERENCES IN UNIFIED CREDIT RESULTING 
FROM DIFFERENT TAX RATES.—
(1) ESTATE TAX.—
(A) IN GENERAL.—Section 2001(b)(2) (re-
lating to computation of tax) is amended by 
striking ‘‘if the provisions of subsection (c) (as 
in effect at the decedent’s death)’’ and inserting 
‘‘if the modifications described in subsection 
(g)’’. 
(B) MODIFICATIONS.—Section 2001 is 
amended by adding at the end the following 
new subsection: 
‘‘(g) MODIFICATIONS TO GIFT TAX PAYABLE TO RE-
FLECT DIFFERENT TAX RATES.—For purposes of apply-
ing subsection (b)(2) with respect to 1 or more gifts, the 
rates of tax under subsection (c) in effect on the date of 
the decedent’s death shall, in lieu of the rates of tax in 
effect at the time of such gifts, be used both to compute—
‘‘(1) the tax imposed by chapter 12 with respect 
to such gifts, and 
‘‘(2) the credit allowed against such tax under 
section 2505, including in computing—
‘‘(A) the applicable credit amount under 
section 2505(a)(1), and 
‘‘(B) the sum of the amounts allowed as a 
credit for all preceding periods under section 
2505(a)(2).
For purposes of paragraph (2)(A), the applicable 
credit amount for any calendar year before 1998 is 
the amount which would be determined under sec-
tion 2010(c) if the applicable exclusion amount were 
the dollar amount under section 6018(a)(1) for such 
year.’’. 
(2) GIFT
TAX.—Section 2505(a) (relating to 
unified credit against gift tax), after the application 
of subsection (g), is amended by adding at the end 
the following new flush sentence: 
‘‘For purposes of applying paragraph (2) for any calendar 
year, the rate schedule under section 2001(c) used in com-
puting the applicable credit amount under paragraph (1) 
for such calendar year shall, in lieu of the rates of tax 
in effect for preceding calendar periods, be used in deter-
mining the amounts allowable as a credit under this sec-
tion for all preceding calendar periods.’’. 
(e) REPEAL
OF DEDUCTION
FOR STATE DEATH 
TAXES.—
(1) IN
GENERAL.—Section 2058 (relating to 
State death taxes) is amended by adding at the end 
the following: 
‘‘(c) TERMINATION.—This section shall not apply to 
the estates of decedents dying after December 31, 2009.’’.