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Estate Tax: Legislative Activity in 2002 , Record No.: RS21224, Date: June 11, 2002 1 (June 11, 2002)

handle is hein.tera/crstax0146 and id is 1 raw text is: Order Code RS21224 Updated June 11, 2002 CRS Report for Congress Received through the CRS Web Estate Tax: Legislative Activity in 2002 Nonna A. Noto Specialist in Public Finance Government and Finance Division Summary The provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA, P.L. 107-16) are scheduled to sunset on December 31, 2010. On April 18, 2002, the House passed legislation, H.R. 586, that would remove the sunset provision and thereby make permanent all other provisions of the tax cut law enacted in June 2001. This includes making permanent the repeal of the estate tax. On June 6, the House passed a free-standing estate tax repeal bill. H.R. 2143 would remove the sunset provision of EGTRRA solely with respect to the estate tax provisions of the 2001 Act. The House defeated a substitute amendment offered by Representative Pomeroy that would have retained the estate tax but increased the estate tax exclusion to $3 million per decedent effective January 1, 2003. The Senate was unlikely to consider a bill to make the entire tax cut package permanent. Instead, the Senate agreed to take up the estate tax alone through H.R. 8 under a unanimous consent agreement, before June 28, 2002. The Senate began consideration of the estate tax on June 11. In addition to an amendment to permanently repeal the estate tax, amendments to alter but retain the estate tax were expected to be introduced in the Senate. This report will be updated as legislative events warrant. Background The estate tax and generation-skipping transfer (GST) tax are scheduled to be repealed effective January 1,2010, under Title V of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA, P.L. 107-16). However, under Title IX of the Act, the estate tax repeal, and all other provisions of EGTRRA, are scheduled to sunset as of December 31, 2010. In 2011 tax law would return to the law that was in place prior to the enactment of EGTRRA on June 7, 2001. The exclusion amount under the estate tax would be $1 million per decedent. For those concerned with permanently repealing the estate tax, attention is now focused on removing the sunset provision of EGTRRA with respect to the estate tax provisions of the Act. The estate tax would then be eliminated from 2010 onward. Other changes made by Title V of EGTRRA would also continue (such as replacing the step-up in basis with a modified carryover basis for assets transferred at death and retaining the Congressional Research Service * The Library of Congress

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