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pay a penalty of $100 for each such failure, but the total
amount imposed for all such failures shall not exceed
$5,000.
‘‘(b) INFORMATION REQUIRED TO BE FURNISHED
TO BENEFICIARIES.—Any executor who fails to furnish in
writing to each person described in section 6039F(b) the
information required under such section shall, if such fail-
ure is due to negligence or intentional disregard of rules
and regulations, pay a penalty of $50 for each such fail-
ure, but the total amount imposed for all such failures
shall not exceed $2,500.
‘‘(c) NEGLIGENT OR FRAUDULENT OVERSTATEMENT
OF INITIAL BASIS.—
‘‘(1) NEGLIGENT
OVERSTATEMENT.—If any
part of an initial basis overstatement is due to neg-
ligence or intentional disregard of rules and regula-
tions (but without intent to defraud) by the execu-
tor, such executor shall pay a penalty equal to 10
percent of such overstatement.
‘‘(2) FRAUDULENT
OVERSTATEMENT.—If any
part of an initial basis overstatement is due to fraud
by the executor, such executor shall pay a penalty
equal to 30 percent of such overstatement.
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‘‘(3) INITIAL
BASIS
OVERSTATEMENT
DE-
FINED.—For purposes of this subsection, the term
‘initial basis overstatement’ means the excess of—
‘‘(A) the initial basis of any carryover basis
property shown on the return of the tax im-
posed by chapter 11 (or, if no such return is re-
quired, 
a 
return 
required 
under 
section
6039F(a)), over
‘‘(B) the amount determined to be the ini-
tial basis of such property.
‘‘(d) DEFICIENCY PROCEDURES NOT TO APPLY.—
Subchapter B of chapter 63 (relating to deficiency proce-
dures for income, estate, gift, and certain excise taxes)
shall not apply in respect of the assessment or collection
of any penalty imposed by this section.’’
(3) CLERICAL AMENDMENTS.—
(A) The table of sections for subpart A of
part III of subchapter A of chapter 61 is
amended by adding after the item relating to
section 6039E the following new item:
‘‘Sec. 6039F. Information regarding carryover basis property ac-
quired from a decedent.’’
(B) The table of sections for part I of sub-
chapter B of chapter 68 is amended by adding
at the end thereof the following new item:
‘‘Sec. 6714. Failure to file information with respect to carryover
basis property.’’
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(f) $125,000 EXCLUSION MADE AVAILABLE
TO
SPOUSE OF DECEDENT IN CERTAIN CASES.—Paragraph
(2) of section 121(d) (relating to property of deceased
spouse) is amended by striking the period at the end
thereof and inserting in lieu thereof ‘‘, and, if the deceased
spouse attained age 55 before the date of his death, then
such individual shall be treated as satisfying the age re-
quirement of subsection (a)(1) with respect to such prop-
erty.’’
(g) EFFECTIVE DATE.—The amendments made by
this section shall apply to estates of decedents dying after
December 31, 1996.
SEC. 3104. MISCELLANEOUS AMENDMENTS RELATED TO
CARRYOVER BASIS.
(a) ALLOWANCE OF CAPITAL LOSS CARRYOVERS TO
AN ESTATE.—Section 642 (relating to special rules for
credits and deductions for estates and trusts) is amended
by redesignating subsection (j) as (k) and by inserting
after subsection (i) the following new subsection:
‘‘(j) UNUSED CAPITAL LOSS CARRYOVER TRANS-
FERRED TO ESTATE.—In the case of a decedent with re-
spect to whom section 1022 (relating to carryover basis
property) applies, if, but for this subsection, part or all
of any capital loss carryover under section 1212(b) for the
decedent’s last taxable year would be lost, then, in accord-
133
ance with regulations prescribed by the Secretary, the es-
tate shall be allowed such carryover under section 1212(b)
beginning with the estate’s first taxable year.’’
(b) CAPITAL GAIN TREATMENT FOR INHERITED ART
WORK OR SIMILAR PROPERTY.—
(1) IN GENERAL.—Subparagraph (C) of section
1221(3) (defining capital asset) is amended by in-
serting ‘‘(other than by reason of section 1022)’’
after ‘‘is determined’’.
(2) COORDINATION WITH SECTION 170.—Para-
graph (1) of section 170(e) is amended by adding at
the end thereof the following new sentence: ‘‘For
purposes of this paragraph, the determination of
whether property is a capital asset shall be made
without regard to the exception contained in section
1221(3)(C) for basis determined under section
1022.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to the estates of decedents dying
after December 31, 1996.
TITLE IV—APPROPRIATIONS
SEC. 4001. APPROPRIATIONS.
There is hereby appropriated for any fiscal year, out
of any money in the Treasury not otherwise appropriated,
an amount equal to each amount authorized by this Act
134
for such fiscal year. Any amount appropriated under the
preceding sentence for any fiscal year shall be expended
only for the purpose for which authorized and shall remain
available until the close of the second following fiscal year.
SEC. 4002. DESIGNATION AS EMERGENCY REQUIREMENT.
The entire amount appropriated under this Act is
designated by Congress as an emergency requirement pur-
suant to section 251(b)(2)(D)(i) of the Balanced Budget
and Emergency Deficit Control Act of 1985.
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