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Federal Estate Tax Bills in Front of Congress

[01] H.R. 96 Save Family-Owned Farms and Small Businesses Act of 2009

  • Introduced by Rep. Michael Conaway [R-TX] on 1/6/09; no cosponsors. 
  • Would increase the maximum reduction in estate tax value for farmland and other special use property under IRC Sec. 2032A to $1,850,000; effective 2010. 
  • Would restore the estate tax deduction for family-owned business interests under IRC Sec. 2057 and increase it to $2,000,000 (adjusted for inflation).

[02] H.R. 99 Fair and Simple Tax Act of 2009

  • Introduced by Rep. David Dreier [R-CA] on 1/6/2009; 3 cosponsors.
  • Would repeal the estate and gift taxes.
  • Would also make other changes to the IRC: reduce taxes by providing an alternative determination of income tax liability for individuals, reduce corporate income tax rates, reduce the maximum tax for individuals on capital gains and dividends to 10 percent, index the basis of assets for purposes of determining capital gain or loss, create tax-free accounts for retirement savings, lifetime savings, and life skills, repeal the adjusted gross income threshold in the medical care deduction for individuals under age 65 who have no employer health coverage.

[03] H.R. 173 To amend the Internal Revenue Code of 1986 to exempt certain farmland from the estate tax

  • Introduced by Rep. John Salazar [D-CO] on 1/6/2009; 11 cosponsors.
  • Would exclude from the gross estate certain farmland so long as farmland use continues.

[04] H.R. 205 Death Tax Repeal Act

  • Introduced by Rep. William Thornberry [R-TX]; 92 cosponsors.
  • Would repeal the federal estate, gift, and GST taxes.  

[05] H.R. 436 Certain Estate Tax Relief Act of 2009

  • Introduced by Rep. Earl Pomeroy [D-ND] on 1/9/09; 1 cosponsors.
  • Exemption?  $3.5M.
  • Exemption adjusted for inflation?  No.
  • Rate?  45%, but a surtax applies to estates over $10M.
  • Unified credit?  No.  Gift tax exemption would remain at $1M. 
  • Would impose restrictions on discounts for certain transactions involving entities owned by related parties. 
  • 11/19/09: Rep. Pomeroy introduced H.R. 4154.  See below.
  • See Jonathan G. Blattmachr & Scott A. Nammacher, Bill Would Have Far Reaching Effect on Gift and Estate Tax Valuation, SSRN (8/23/09).
  • See AICPA Comments on HR 436- Pomeroy Estate Tax Reform Bill Regarding Elimination of  Discounts on Non Actively Traded Business (3/20/09).
  • See Julie Garber, Overview of H.R. 4154, Julie's Wills & Estate Planning Blog (11/23/09) ("According to Emory law school professor Jeffrey N. Pennell at a seminar I attended back in May, 'H.R. 436 is "garbage." It has been introduced in the last two Congressional sessions, has no other sponsors, and has gone absolutely nowhere.' Thus, H.R. 436 has little if any chance of becoming law.").

[06] H.R. 498 Capital Gains and Estate Tax Relief Act of 2009

  • Introduced by Rep. Harry E. Mitchell [D-AZ-5] on 1/14/2009; 7 cosponsors.
  • Unified credit?  Yes.
  • Exemption? Up to $5M, starting 2015.
    • 2010: $3,750,000
    • 2011: $4,000,000
    • 2012: $4,250,000
    • 2013: $4,500,000
    • 2014: $4,750,000
    • 2015 and thereafter: $5,000,00
    • Indexed for inflation after 2015.
  • Rate?
    • Rate specified in section 1(h)(1)(C) for estates under $25,000,000, and twice the rate specified section 1(h)(1)(C) for estates over $25,000,000.
    • $25,000,000 would be indexed for inflation after 2015.
  • Would repeal the deduction for state death taxes.
  • Portability?  Yes.
  • Would also make permanent the individual income tax rates for capital gains, and for other purposes.

[07] H.R. 533 Opportunity for Family Farms and Small Businesses Act of 2009

  • Introduced on 1/14/09 by Rep. Randy Neugebauer [R-TX-19]; no cosponsors.
  • Would permanently repeal the estate tax.
  • Would also make permanent increased expensing for small businesses under I.R.C. section 179(b), and would eliminate the SECA tax deduction for health insurance costs.

[08] H.R. 1328 Farmland Preservation and Land Conservation Act of 2009

  • Introduced by Rep. Timothy Bishop [D-NY] on 3/5/09; 3 cosponsors.
  • Would amend the Internal Revenue Code of 1986 to allow an unlimited exclusion from transfer taxes for certain farmland and land of conservation value, and for other purposes.

[09] H.R.1763 Responsible Reinvestment Act of 2009

  • Introduced by Rep. Robert E. Latta on 3/26/2009; 23 cosponsors.
  • Would permanently repeal the estate and GST taxes.
  • Would also increase expensing for small businesses under IRC Sec. 179(b); provide an accelerated deduction for manufacturing and agricultural property; amend the deduction or qualified small business income; and make modifications for small businesses related to health insurance, health savings accounts and simplified employee pensions.

[10] H.R. 1960 Permanent Death Tax Repeal Act of 2009

  • Introduced by Rep. Joseph R. Pitts [PA-16]; 20 cosponsors.
  • Would permanently repeal the estate and GST taxes. 

[11] H.R. 1986 To amend the Internal Revenue Code of 1986 and the Economic Growth and Tax Relief Reconciliation Act of 2001 to restore the estate tax, increase the estate tax unified credit to an exclusion equivalent of $4,000,000, reduce the maximum estate tax rate to 40 percent, and for other purposes

  • Introduced by Rep. Travis Childers [D-MS-1] on 4/21/2009; 1 cosponsor.
  • Exemption? $4M.
  • Rate?  40%.

[12] H.R. 2023 Sensible Estate Tax Act of 2009

  • Introduced by Rep. Jim McDermott [D-WA-7] on 4/22/09, no cosponsors.
  • Exemption? $2M.
  • Unified?  Yes.
  • Inflation adjusted? Yes.
  • Rate?  Top rate of 55% (for estates over $10M).
  • Would restore state death tax credit.
  • Portability?  Yes.

[13] H.R. 2658 To amend the Internal Revenue Code of 1986 to increase the estate and gift tax unified credit to an exclusion equivalent of $5,000,000, to adjust such amount for inflation, to repeal the 1-year termination of the estate tax, and for other purposes.

  • Introduced by Rep. Michael E. Capuano [D-MA-8] on 6/2/09; no cosponsors.
  • Exemption?  $5M.
  • Adjusted for inflation?  Yes.

[14] H.R. 3050 American Family Farm and Ranchland Protection Act

  • Introduced by Rep. Earl Blumenauer [D-OR-3]; 9 cosponsors.
  • Would increase to $5,000,000 the limitation on the amount excluded from the gross estate with respect to land subject to a qualified conservation easement.
  • Sen. Udall’s S. 3640 is identical to H.R. 3050.  Section 3 of Rep. Thompson’s H.R. 5475 is also the same, except H.R. 5476 would be effective on its enactment.
  • For a summary of the changes these bills would make, see Sen. Udall’s press release: American Family Farm and Ranchland Protection Act, S. 3640. 

[15] H.R. 3463 Death Tax Repeal Permanency Act of 2009

  • Introduced by Rep. Kevin Brady [R-TX-8] on July 31, 2009; 34 cosponsors.
  • Would permanently repeal the estate and GST taxes.

[16] H.R. 3524 Family Farm Preservation and Conservation Estate Tax Act

  • Introduced by Rep. Michael Thompson [D-CA] on 6/31/09; 58 cosponsors.
  • Would exclude from the gross estate the value of property used by a decedent and the decedent's family as a farm for farming purposes and certain qualified conservation easements, but would also impose a recapture tax.  
  • See Coalition for Agricultural Estate Tax Reform (10/27/09) (providing a number of documents: bill summary, talking points to members of Congress, misc. articles, and a list of 69 organizations supporting H.R. 3524).
  • See Hani Sarji, Exclusive Interview with Josh Rolph, a national affairs director for the California Farm Bureau Federation (11/3/09) (explaining why ranchers and farmers support H.R. 3524).
  • See Mike Emigh, Federal Estate Tax Reform Needed to Protect Family Farms, Capital Press (11/19/09) (stating that this bill "is supported by a broad coalition of almost 70 agricultural and environmental interests as preservation of farmland is consistent with the preservation of open space").

[17] H.R. 3586 S Corporation ESOP Promotion and Expansion Act of 2009

  • Introduced by Rep. Ronald Kind [D-WI] on 9/16/09; 17 cosponsors.
  • The summary of the bill shows that two provisions would affect the federal estate tax.  H.R. 3586 would "transfer liability for payment of estate tax on transfers of employer securities to an S corporation-sponsored ESOP from the estate executor to the ESOP; and allow an estate tax deduction for 50% of the proceeds from the sale of employer securities to an S corporation-sponsored ESOP."

[18] H.R. 3841 Small Business and Family Farm Estate Tax Relief Act of 2009

  • Introduced by Rep. Kurt Schrader [D-OR-5] on October 15, 2009; no cosponsors.
  • Exemption? $5M.
  • Rate? 45%.

[19] H.R. 3905 Estate Tax Relief Act of 2009

  • Introduced by Rep. Shelley Berkley [D-NV] on 10/22/09; 47 cosponsors (including Rep. Kevin Brady [R-TX]).
  • Exemption?  Gradually increased from $3,650,000 in 2010 to $5,000,000 in 2019.
  • Exemption adjusted for inflation?  Yes, in 2010 and beyond.
  • Rate?  Gradually reduced from 44% in 2010 down to 35% in 2019.
  • State tax deduction?  Gradually phased out at 10% per year; by 2019 the deduction would be completely eliminated.
  • Portability?  No.
  • 10/30/2009: The Tax Policy Center released estimates from 2009 to 2019 of estate tax returns and liability under current law and under various reform proposals.  It indicates that H.R. 3905 would provide the government $192.4 billion from 2009 to 2019.
  • 11/02/2009: The Center on Budget and Policy Priorities published a report that said that H.R. 3905 "would cost $119 billion more over the first decade (2012-2021) than extending the tax under its current rules as the President has proposed."
  • 11/13/2009: Backed by Americans for Tax Reform (11/13/09) [reported in this blog here]
  • See Hani Sarji, Exclusive Interview with Josh Rolph, a national affairs director for the California Farm Bureau Federation (11/3/09) (explaining why ranchers and farmers support H.R. 3905).
  • See Julie Garber, Overview of H.R.3905, Julie's Wills & Estate Planning Blog (11/9/09) (summarizing the bill and distinguishing it from others).
  • See Martin Vaughan, US Senate Centrists Ponder Gradual Estate Tax Reduction, Dow Jones Newswires (11/13/09) (discussing how the phase-down feature of the bill could be a template for other phase-down proposals). [summarized in this blog here]

[20] H.R. 4015  Family Farm and Small Business Tax Relief Act of 2009

[21] H.R. 4035 To amend the Internal Revenue Code of 1986 to allow the estate of a decedent to use the capital loss carryover of the decedent as a deduction against estate tax.

  • Introduced by Rep. Kenny Marchant [R-TX-24] on 11/5/09; no cosponsors. 
  • This bill would amend the Internal Revenue Code of 1986 to allow the estate of a decedent to use the capital loss carryover of the decedent as a deduction against estate tax. 
  • See Wills, Trusts & Estates Prof Blog (11/13/09) (reporting on the bill's introduction)

[22] H.R. 4154 Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009

  • Introduced by Rep. Earl Pomeroy [D-ND] on 11/19/09; 11 cosponsors.
  • Exemption? $3.5M
  • Rate?  top rate of 45% for both the estate and gift taxes 
  • Unified credit?  No
  • Portability?  No
  • Indexed for inflation?  No
  • This bill would continue both the gift tax and the generation skipping transfer tax.
  • H.R. 4154 would not "repeal all of the EGTRRA transfer tax provisions.  In addition to the $1 million lifetime gift tax exclusion amount [this bill would retain] EGTRRA's [a] repeal of the state death tax credit in favor of the estate tax deduction, [b] repeal of the qualified family-owned business deduction, [c] modification to a qualified conservation easements, [d] modification to the estate tax installment payment rules, and [e] modification of certain GST tax rules."  CCH Tax Briefing: Federal Estate Tax (H.R. 4154), CCH (12/21/09).   
  • Rep. Pomeroy also introduced H.R. 436 earlier this year.  See above. 
  • H.R. 4154's introduction was reported in this blog here.
  • See Julie Garber, Overview of H.R. 4154, Julie's Wills & Estate Planning Blog (11/23/09) (summarizing H.R. 4154 and providing information on Rep. Pomeroy's other bill, H.R. 436).
  • See Martin Vaughan, US House To Vote On Permanent Estate Tax Bill Next Week, Dow Jones Newswires (11/25/09) (reporting that the House will vote on this bill as early as Wed. 12/2/09,that the bill would cost the gov. $233B, and that are enough opponents to block action in the Senate).  [summarized in this blog here]
  • 12/2/09: H.RES.941.RH (Reported in House) - Providing for consideration of the bill (H.R. 4154) to amend the Internal Revenue Code of 1986 to repeal the new carryover basis rules in order to prevent tax increases and the imposition of compliance burdens on many more estates than would benefit from repeal, to retain the estate tax with a $3,500,000 exemption, and for other purposes. 
  • 12/2/09: House Report 111-350 - the House Committee on Rules reporting on H.RES.941.RH.
  • 12/3/09: Roll Call 929 – The House passed H.R. 4154: 225 yes (all Democrats), 200 nos (26 Democrats, 174 Republicans), 9 did not vote (6 Democrats, 3 Republicans). 
  • 12/3/09: H.RES.941.EH (Engrossed as Agreed to or Passed by House).  See C-SPAN Congressional Glossary for a definition of engrossed bill.
  • Joint Committee on Taxation: Technical Explanation (JCX-57-09); Estimated Revenue Effects (JCX-58-09).  
  • House Ways & Means Committee: Press Release
  • CCH Tax Briefing: Permanent Estate Tax Relief for Families, Farmers, and Small Business Bill of 2009, CCH (12/4/09). 
  • CCH Tax Briefing: Federal Estate Tax (H.R. 4154), CCH (12/21/09) (summarizing H.R. 4154 and providing that "[o]ne of the largest stumbling blocks to passage of an extension of the 2009 estate tax regime in the Senate is the $3.5 million exclusion.  Many senators from both parties favor a higher exclusion, reaching $5 million.  The House and Senate will need to reconcile their differences over the size of the exclusion amount.").  

[23] H.R. 4174 Tax Relief for Business Growth and Sustainability Act of 2009

  • Introduced by Rep. Glenn Nye [D-VA] on 12/2/09; no cosponsors.
  • Exemption? $5M
  • Rate?  35% top rate
  • Effective date? These changes would be for decedents dying, and gifts made, after 12/31/10.
  • The bill would remove the carryover basis provided for in EGTRRA for 2010.
  • H.R. 4174 provides for a number of other changes.  [summarized in this blog here]

[24] H.R. 4208 To amend the Internal Revenue Code of 1986 to increase the limitation on the reduction in fair market value of real property used for farming, or in another trade or business, for purposes of estate taxes.

  • Introduced by Rep. Thomas Perriello [D-VA] on 12/3/09; no cosponsors.
  • The bill would increase the aggregate reduction in fair market value allowed under special use valuation to $3.5M, and would be effective after the date of its enactment.

[25] H.R. 4270 To amend the Internal Revenue Code of 1986 to make permanent certain temporary provisions, including the sales tax deduction, the child credit, the repeal of the estate tax, the deduction for higher education expenses, and extending the current capital gains and dividend tax rates.

[26] H.R. 4849 Small Business and Infrastructure Jobs Tax Act of 2010.

[27] H.R. 4899 Disaster Relief and Summer Jobs Act of 2010

  • Introduced by Rep. David R. Obey [D-WI-7]; no cosponsors.
  • Would restrict GRATs.  
  • Restrictions on GRATs were not in the original bill.  In House Passes GRAT, Biofuel Limits in Spending Bill (Tax Notes Today, Doc 2010-14832, 2010 TNT 128-2), Chuck O'Toole informs, “[t]he House voted 215-210 to approve the resolution (H. Res. 1500) that added the tax provisions to H.R. 4899.”  The text of H. Res. 1500 is available on Thomas.gov, here.
  • Loeb & Loeb, High Net Worth Tax Report, Vol. 5 No. 2 (“the Senate passed that bill [in July] without the GRAT provision and the House relented”).
  • 7/29/10: Bill was presented to and signed by President Obama. It became Public Law No: 111-212.

[28] H.R. 5029 Economic Freedom Act of 2010

  • Introduced by Rep. Jim Jordan [R-OH] on 4/15/10; 39 cosponsors.
  • Would permanently repeal the estate tax.
  • Would also provide a zero percent capital gains tax rate for individuals and corporations, cut corporate tax rates, expand business expensing under Sec. 179, and cut payroll taxes for 2010.

[29] H.R. 5109 Small Business Bill of Rights

  • Introduced by Rep. Mark Steven Kirk [R-IL] on 4/22/10; 7 cosponsors. 
  • Sec. 301 of the bill provides for “Postponement of termination of estate tax and generation-skipping transfer taxes.”  But the language would extend repeal of the estate tax (and EGTRRA’s provisions on wealth transfer) until December 31, 2015.

SEC. 301. POSTPONEMENT OF TERMINATION OF ESTATE TAX AND GENERATION-SKIPPING TRANSFER TAXES.

(a) APPLICATION OF EGTRRA SUNSET. -- Section 901(a)(2) of title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 is amended by striking "December 31, 2010" and inserting "December 31, 2015".

(b) EFFECTIVE DATE. -- The amendments made by this section shall apply to the estates of decedents dying, gifts made, or generation-skipping transfers, after December 31, 2010.

  • H.R.5109 would also provide tax relief for small businesses, including capital gains and alternative minimum tax relief, tax benefits for start-ups, and energy efficiency tax incentives.

[30] H.R. 5297 Small Business Lending Fund Act of 2010.

[31] H.R. 5475 Family Farm Estate Tax Relief Act of 2010

  • Introduced by Rep. Michael Thompson [D-CA] on 5/28/10; 26 cosponsors.
  • Would exempt farmland from the estate tax so long as the farmland is still in use.
  • Would increase to $5 million the amount excluded from the gross estate with respect to land subject to a qualified conservation easement.
  • Rep. Thompson’s bill is receiving much support from farmer and rancher groups:
    • Thompson introduces estate tax relief bill to help benefit agriculture, Lake County News, June 5, 2010 (“Robert Gayaldo, president of Lake County Farm Bureau, said the group appreciates Thompson's work on the estate tax. . . . The legislation has many supporters in the First Congressional district including the California Farm Bureau Environmental Defense Fund, Land Trust Alliance, California Wine Grape Growers, California Farm Bureau, Western Growers and United Fruit and Vegetable Growers.”)
    • NCBA, PLC Support Thompson Bill to Keep Family Farms and Ranches Intact, Cattle Network, June 7, 2010 (“The National Cattlemen’s Beef Association (NCBA) and the Public Lands Council (PLC) are calling on Congress to protect family farms and ranches from being taxed out of business by supporting H.R. 5475 . . . H.R. 5475 would defer the estate tax for as long as the operation remains in agriculture. If the owner were to either stop farming or sell the property, a recapture tax would be imposed. The bill would also allow farmers and ranchers to qualify for a more generous tax deduction for land donated to a conservation easement.”). 
  • Gerry Beyer, New Estate Tax Proposal, Wills, Trusts & Estates Prof Blog, July 17, 2010 ("The latest proposal came from Representative Thompson (D-CA). He advocates an unlimited exemption for farms. However, an exemption like this one would simply incentivize the ultra-wealthy to transfer their wealth to farmland, effectively allowing these few families to opt out of paying estate taxes. Further, it would actually hurt farmers rather than helping them because the price of agricultural land would increase.").  
  • Hani Sarji, On July 28, 2010, Sen. Feinstein introduced S. 3664, which would exempt certain farmland from the estate tax, Future of the Federal Estate Tax, July 31, 2010 (compares Rep. Thompson’s H.R. 5475 with Sen. Feinstein’s S. 3664).

[32] H.R.5486 To amend the Internal Revenue Code of 1986 to provide tax incentives for small business job creation, and for other purposes

[33] H.R. 5764 Responsible Estate Tax Act

[34] H.R. 5982 Small Business Tax Relief Act of 2010

  • Introduced by Rep. Sander M. Levin [D-MI-12] on 7/30/10; 21 cosponsors.
  • Would require 10-year minimum term for Grantor Retained Annuity Trusts (GRATS). 

[35] H.R. 6415 Tax Relief Certainty Act

[36] S. 722 Taxpayer Certainty and Relief Act of 2009

  • Introduced by Sen. Max Baucus [D-MT]on 3/26/2009; 2 cosponsors.
  • Exemption?  $3.5M.
  • Unified?  Yes.
  • Inflation adjusted? Yes.
  • Portability?  Yes.
  • Rate? 45%.
  • Would increase to $3.5M the aggregate reduction in fair market value allowed under special use valuation.
  • See Timothy J. Vitollo, Portability at Last.

[37] S. 1605 A bill to amend the Internal Revenue Code of 1986 to reform the rules relating to fractional charitable donations of tangible personal property.

[38] S. 2728 A bill to amend the Internal Revenue Code of 1986 to provide that the value of certain historic property shall be determined using an income approach in determining the taxable estate of a decedent.

  • Introduced by Sen. Richard Burr [R-NC] on 11/4/09; 3 cosponsors.
  • Would amend the estate tax valuation of certain historic property.

[39] S. 2784 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.

[40] S. 3533 Responsible Estate Tax Act

[41] S. 3548 Extend COBRA Premium Assistance Program Act of 2010.

  • Introduced by Sen. Robert P. Casey [D-PA] on 6/29/10; 10 cosponsors. 
  • Section 2(b) of S.3548 would restrict GRATs by requiring a minimum 10-year term and a remainder interest that has a value greater than zero determined as of the time of the transfer.

[42] S. 3640 American Family Farm and Ranchland Protection Act of 2010.

  • Introduced by Sen. Mark Udall [D-CO] on 7/22/10; 6 cosponsors.
  • Would increase to $5,000,000 the limitation on the amount excluded from the gross estate with respect to land subject to a qualified conservation easement.
  • Would make the same changes as Rep. Blumenauer’s H.R. 3050 and Section 3 of Rep. Thompson’s H.R. 5475.
  • For a summary of the changes these bills would make, see Sen. Udall’s press release: American Family Farm and Ranchland Protection Act, S. 3640. 

[43] S. 3664 Family Farm Estate Tax Deferral Act of 2010.

[44] S. 3733 Tax Hike Prevention Act of 2010.

[45] S. 3975 Tax Certainty Relief Act

(You can help make this an even better resource by e-mailing me your suggestions for revisions or additions.  If you publish an article or a blog entry that mentions one of these bills, let me know and I will add it to the list.)

[Last updated 11/26/2010.]

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