State taxes must have been paid and claimed before the later of: (1) four years after the filing of the estate tax return; or (2) (a) 60 days after a decision of the U.S. Tax Court determining the estate tax liability becomes final, (b) the expiration of the period of extension to pay estate taxes over time under section 6166, or (c) the expiration of the period of limitations in which to file a claim for refund or 60 days after a decision of a court in which such refund suit has become final. The estate and gift rate reductions, increases in the estate tax unified credit exemption equivalent amounts and generation-skipping transfer tax exemption amount, and reductions in and repeal of the state death tax credit are phased-in over time, beginning with estates of decedents dying and gifts and generation-skipping transfers after December 31, 2001. B. Expand Estate Tax Rule for Conservation Easements The conference agreement expands availability of qualified conservation easements by eliminating the requirement that the land be located within a certain distance from a metropolitan area, national park, wilderness area, or Urban National Forest. Thus, under the conference agreement, a qualified conservation easement may be claimed with respect to any land that is located in the United States or its possessions. The provisions are effective for estates of decedents dying after December 31, 2000. C. Modify Generation-Skipping Transfer Tax Rules The conference agreement makes the following modifications to the generationskipping transfer tax provisions: (1) Deemed allocation of the generation-skipping transfer tax exemption to lifetime transfers to trusts that are not direct skips; (2) Retroactive allocation of the generation-skipping tax exemption; (3) (4) Severing of trusts holding property having an inclusion ratio of greater than zero; Modification of certain valuation rules; The provisions are generally effective after December 31, 2000. D. Availability of Installment Payment Relief The conference agreement expands the availability of installment payment rules to qualified lending and finance business interests and certain holding company stock. In addition, the conference agreement increases from 15 to 45 the number of partners of a 11 partnership or shareholders in a corporation eligible for installment payments of estate tax. The provisions are effective for decedents dying after December 31, 2001. E. Estate Tax Recapture from Cash Rents of Specially-Valued Property The conference agreement provides that, if on the date of enactment or at any time within one year after the date of enactment, a claim for refund or credit of any overpayment of tax resulting from the application of net cash lease provisions for spouses and lineal descendants (sec. 2032A(c)(7)(E)) is barred by operation of law or rule of law, then the refund or credit of such overpayment shall, nonetheless, be allowed if a claim therefore is filed before the date that is one year after the date of enactment. This provision is effective for refund claims filed prior to the date that is one year after the date of enactment. VI. PENSION AND INDIVIDUAL RETIREMENT ARRANGEMENT PROVISIONS The conference agreement makes extensive changes to the rules relating to individual retirement arrangements (“IRAs”) and qualified pension plans. Among the changes included in the conference agreement are the following provisions: (1) (2) Increased contribution limits and catch-up contributions to IRAs; Provisions for expanding coverage, including increased contribution and benefit limits for qualified plans, increases in elective deferral limits, and a credit for certain elective deferrals and IRA contributions; (3) Provisions to enhance fairness for women, including additional catch-up contributions for individuals over age 50; The conference agreement increase the individual alternative minimum tax exemption amount by $2,000 (for single taxpayers) and $4,000 for married taxpayers filing joint returns for 2001 through 2004. VIII. MISCELLANEOUS PROVISIONS Corporate estimated tax The conference agreement provides that corporate estimated tax payments due on September 15, 2001, are delayed until October 1, 2001, and a portion of corporate estimated tax payments due on September 15, 2004, are delayed until October 1, 2004. 12 Authority to postpone certain tax-related deadlines by reason of Presidentially declared disaster The conference agreement permits the Secretary of the Treasury to postpone certain tax-related deadlines for up to 120 days for taxpayers determined to be affected by a Presidentially declared disaster. The provision is effective upon enactment. Income tax treatment of certain restitution payments to Holocaust victims The conference agreement provides that excludable restitution payments made to an eligible individual (or the individual's heirs or estate) are: (1) excluded from gross income; and (2) not taken into account for any provision of the Code that takes into account excludable gross income in computing adjusted gross income (e.g., taxation of Social Security benefits). The provision is effective for amounts received on or after January 1, 2000, with no inference with respect to the income tax treatment of any amount received before January 1, 2000. IX. SUNSET To ensure compliance with the Congressional Budget Act of 1974, the conference agreement provides that all provisions of the bill generally do not apply for taxable, plan or limitation years beginning after December 31, 2010. 13 Public Law 107-22 107th Congress An Act July 26, 2001 [S. 1190] 26 USC 530. 26 USC 72. To amend the Internal Revenue Code of 1986 to rename the education individual retirement accounts as the Coverdell education savings accounts. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. RENAMING EDUCATION INDIVIDUAL RETIREMENT (a) IN GENERAL.— (1) Section 530 of the Internal Revenue Code of 1986 is amended by striking "an education individual retirement account" each place it appears and inserting “a Coverdell education savings account". (2) Section 530(a) of such Code is amended— (A) by striking "An education individual retirement account" and inserting "A Coverdell education savings account", and (B) by striking "the education individual retirement account" and inserting "the Coverdell education savings account". (3) Section 530(b)(1) of such Code is amended (A) by striking "education individual retirement account" in the text and inserting "Coverdell education savings account”, and (B) by striking "EDUCATION INDIVIDUAL RETIREMENT ACCOUNT" in the heading and inserting "COVERDELL EDUCATION SAVINGS ACCOUNT". (4) Sections 530(d)(5) and 530(e) of such Code are amended by striking "education individual retirement account" each place it appears and inserting "Coverdell education savings account". (5) The heading for section 530 of such Code is amended to read as follows: “SEC. 530. COVERDELL EDUCATION SAVINGS ACCOUNTS.”. (6) The item in the table of contents for part VII of subchapter F of chapter 1 of such Code relating to section 530 is amended to read as follows: "Sec. 530. Coverdell education savings accounts.". (b) CONFORMING AMENDMENTS. (1) The following provisions of the Internal Revenue Code of 1986 are amended by striking "an education individual retirement" each place it appears and inserting "a Coverdell education savings": (A) Section 72(e)(9). (B) Section 135(c)(2)(C). (C) Section 4973(a). (D) Subsections (c) and (e) of section 4975. (2) The following provisions of such Code are amended by striking "education individual retirement" each place it appears in the text and inserting "Coverdell education savings": (A) Section 26(b)(2)(E). (B) Section 4973(e). (C) Section 6693(a)(2)(D). (3) The headings for the following provisions of such Code are amended by striking "EDUCATION INDIVIDUAL RETIREMENT” each place it appears and inserting "COVERDELL EDUCATION SAVINGS". (A) Section 72(e)(9). (B) Section 135(c)(2)(C). (C) Section 529(c)(3)(B)(vi). (D) Section 4975(c)(5). (4) The heading for section 4973(e) of such Code is amended by striking "EDUCATION INDIVIDUAL RETIREMENT” and inserting "ČOVERDELL EDUCATION SAVINGS". 26 USC 135. 26 USC 4973. 26 USC 4975. 26 USC 26. 26 USC 6693. 26 USC 72. 26 USC 135. 26 USC 529. (c) EFFECTIVE DATE.-The amendments made by this section 26 USC 2626 shall take effect on the date of the enactment of this Act. Approved July 26, 2001. note. LEGISLATIVE HISTORY-S. 1190: |