,i  #aag? ,,congress  #a/ ,session  ,h4 
,r4 #bbhf  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,m>* #bi1 #bjba,mr4   
,pascrell introduc$ ! foll[+ bill2 :i* 0
 ref]r$ to ! ,committee on ,ways &      
,means  ,a ,,bill  ,to am5d ! ,int]nal  
,rev5ue ,code ( #aihf to treat prop]ty  
transf]r$ by gift or at dea? z sold =   
fair m>ket value1 & = o!r purposes4  #a4
 ,deem$ realization ( capital ga9s at "t
 ( gift or dea?  7a7 ,treatm5t z sale   
7#a7 ,9 g5]al ,"p ,,iv ( sub*apt] ,p (  
*apt] #a ( ! ,int]nal ,rev5ue ,code (   
#aihf is am5d$ by add+ at ! end ! foll[+
 new section3  #abfa4 ,ga9s f c]ta9     
prop]ty transf]r$ by gift or ^u dea?    
7a7 ,9 g5]al ,any prop]ty :i* is        
transf]r$ by gift or at dea? %all be    
treat$ z sold = its fair m>ket value on 
! date ( su* gift or dea?4  7b7         
,exceptions  7#a7 ,sp\se or surviv+     
sp\se ,?is section %all n apply to a    
transf] ( prop]ty to ! transf]or's sp\se
 or surviv+ sp\se if su* sp\se or       
surviv+ sp\se is a citiz5 ( ! ,unit$    

,/ates4  7#b7 ,c]ta9 tangible p]sonal   
prop]ty ,9 ! case ( tangible p]sonal    
prop]ty1 ?is section %all apply only to 
! foll[+3 7,a7 ,prop]ty held 9          
connection ) a trade or bus9ess4  7,b7  
,prop]ty held = inve/m5t4  7,c7         
,collectibles 7z def9$ 9 section #djh7m7
 7det]m9$ )\t reg>d to p>agraph 7#c7    
!re(774  7#c7 ,*>itable contributions   
,?is section %all n apply to any transf]
 to an organization describ$ 9 section  
#agj7;c74  7c7 ,special rules = tru/s   
7#a7 ,c]ta9 grantor tru/s ,9 ! case (   
any prop]ty :i*-- 7,a7 is held 9 a tru/ 
( :i* ! grantor or ano!r p]son is treat$
 z ! own] "u subp>t ,e ( "p ,i (        
sub*apt] ,j ( *apt] #a1 &  7,b7 is      
includible 9 ! gross e/ate ( ! grantor  
or su* o!r p]son "u *apt] #aa1  su*     
prop]ty %all be treat$ z transf]r$ "u   
subsection 7a7 :5 ! grantor or su* o!r  
p]son ceases to be treat$ z ! own] ( su*
 prop]ty1 or su* prop]ty ceases to be   
includible 9 ! gross e/ate ( ! grantor  
or su* o!r p]son 7includ+ by reason ( ! 

dea? ( ! grantor or su* o!r p]son1 or ! 
di/ribution ( su* prop]ty to a p]son o!r
 ?an ! grantor or su* o!r p]son74  7#b7 
,o!r tru/s ,9 ! case ( any prop]ty held 
9 tru/ & n describ$ 9 p>agraph 7#a71 su*
 prop]ty %all be treat$ z transf]r$ "u  
subsection 7a7 ^u ! transf] ( su*       
prop]ty to a tru/4  7#c7 ,transf]s f &  
modifications ( tru/s ,any modification 
( ! direct or indirect b5efici>ies ( a  
tru/ 7or ! rights ( ! b5efici>ies to    
tru/ assets7 or any transf] or          
di/ribution ( tru/ assets 7includ+ to   
ano!r tru/7 %all be treat$ z a transf]  
describ$ 9 subsection 7a71 unless !     
,secret>y det]m9es t any su* transf] or 
modification is ( a type :i* does n h ! 
pot5tial = tax avoidance4  7#d7 ,dyna/y 
tru/s  7,a7 ,9 g5]al ,any prop]ty t is  
cont9u\sly held 9 tru/ & is n subject to
 subsection 7a7 = a p]iod ( #cj ye>s    
%all be treat$ z transf]r$ pursuant to  
subsection 7a7 at ! end ( su* #cj ye>   
p]iod4  7,b7 ,prop]ty held 9 tru/ on !  
effective date ,any prop]ty held 9 tru/ 

on ,janu>y #a1 #bjbb1 t has be5         
cont9u\sly held 9 tru/ = m ?an #cj ye>s 
z ( su* date %all be treat$ z transf]r$ 
pursuant to subsection 7a7 on su* date4 
7,c7 ,c]ta9 grantor tru/s & qualify+    
sp\sal tru/s ,= purposes ( ?is p>agraph1
 prop]ty %all n be treat$ z held 9 tru/ 
dur+ any p]iod :5 su* prop]ty is held by
 a tru/ describ$ 9 p>agraphs 7#a77;,a7 &
 7#a77;,b71 or :5 su* prop]ty is held by
 a qualify+ sp\sal tru/4  7#e7 ,qualify+
 sp\sal tru/  7,a7 ,9 g5]al ,p>agraphs  
7#a71 7#b71 7#c71 & 7#d7 %all n apply 9 
! case ( a qualify+ sp\sal tru/1 & !    
prop]ty ( su* tru/ %all be treat$ z     
transf]r$ "u subsection 7a7-- 7i7 ^u !  
dea? ( ! sp\sal b5efici>y1  7ii7 ^u !   
di/ribution ( su* prop]ty f su* tru/ to 
any p]son o!r ?an ! sp\sal b5efici>y :o 
is a citiz5 ( ! ,unit$ ,/ates1 or  7iii7
 at su* "t su* prop]ty ceases to be held
 by a qualify+ sp\sal tru/4  7,b7       
,qualify+ sp\sal tru/ ,= purposes ( ?is 
section1 a tru/ is a qualify+ sp\sal    
tru/ if-- 7i7 su* tru/ is a qualifi$    

dome/ic tru/ 7z def9$ 9 section         
#bjef;,a71  7ii7 ! sole curr5t income   
b5efici>y ( su* tru/ is ! sp\se or      
surviv+ sp\se ( ! transf]or ( prop]ty to
 su* tru/1 &  7iii7 su* transf]or 7dur+ 
! life ( su* transf]or7 or su* sp\se or 
surviv+ sp\se has ! p[] to appo9t ov] ! 
entire tru/4  7d7 ,exclusion ( c]ta9    
gifts ,9 ! case ( gifts made to any     
individual dur+ ! taxable ye>1 s mu* ( !
 doll> am\nt ( su* gifts to su*         
individual z does n exce$ ! am\nt 9     
effect = ! cal5d> ye> "u section        
#bejc7;b7 9 :i* ! taxable ye> beg9s %all
 n be tak5 into acc\nt "u subsection 7a7
 = su* taxable ye>4  7e7 ,regulations ,!
 ,secret>y %all prescribe su*           
regulations z may be necess>y to prev5t 
! avoidance ( ! purposes ( ?is section4 
4  7#b7 ,cl]ical am5dm5t ,! table (     
sections = "p ,,iv ( sub*apt] ,p ( *apt]
 #a ( su* ,code is am5d$ by add+ at !   
end ! foll[+ new item3  ,sec4 #abfa4    
,ga9s f c]ta9 prop]ty transf]r$ by gift 
or ^u dea?4  4  7b7 ,coord9ation (      

relat$ p>ty loss rules ,section #bfg (  
su* ,code is am5d$ by add+ at ! end !   
foll[+ new subsection3  7h7 ,prop]ty    
treat$ z sold at dea? ,subsection       
7a77#a7 %all n apply to any prop]ty t is
 transf]r$ at dea? & treat$ z sold "u   
section #abfa4  4  7c7 ,treatm5t ( basis
 = gifts & beque/s to :i* tax applies   
7#a7 ,elim9ation ( c>ryov] basis = gifts
 ,section #ajae7;a7 ( su* ,code is      
am5d$-- 7,a7 by /rik+ ,if ! prop]ty &   
ins]t+ ! foll[+3  7#a7 ,gifts be=e      
,janu>y #a1 #bjbb ,if ! prop]ty  2  7,b7
 by ins]t+ 1 & be=e ,janu>y #a1 #bjbb   
aft] aft] ,decemb] #ca1 #aibj2 &  7,c7  
by add+ at ! end ! foll[+ new p>agraph3 
7#b7 ,gifts aft] ,decemb] #ca1 #bjba ,if
 ! prop]ty 0 acquir$ by gift aft]       
,decemb] #ca1 #bjba1 ! basis %all be !  
fair m>ket value ( su* prop]ty at ! "t (
 ! gift4  4  7#b7 ,rules = transf]s     
betwe5 sp\ses  7,a7 ,9 g5]al ,section   
#ajda7;b7 ( su* ,code is am5d$ to read z
 foll[s3  7b7 ,transf]ee has transf]or's
 basis ,9 ! case ( any transf] ( prop]ty

 describ$ 9 subsection 7a71 ! basis ( ! 
transf]ee 9 ! prop]ty %all be ! adju/$  
basis ( ! transf]or4  4  7,b7 ,transf]s 
at dea? ,section #ajda7;a7 ( su* ,code  
is am5d$ by ins]t+ 7includ+ at dea?7    
aft] transf] ( prop]ty4  7,c7 ,con=m+   
am5dm5ts  7i7 ,section #ajad ( su* ,code
 is am5d$ by add+ at ! end ! foll[+ new 
subsection3  7g7 ,prop]ty acquir$ f     
dec$5t sp\se ,9 ! case ( prop]ty :i*    
passes f ! dec$5t to 7or 9 tru/ = !     
b5efit (7 ! dec$5t's surviv+ sp\se 9 a  
transf] describ$ 9 section              
#ajda7;a77#a71 ! basis ( su* prop]ty 9 !
 h&s ( ! transf]ee %all be det]m9$ "u   
section #ajda7;b7 & n ?is section4  1 & 
7ii7 ,section #ajae7;e7 ( su* ,code is  
am5d$ by /rik+ #ajda7;b77#b7 & ins]t+   
#ajda7;b74  7#c7 ,basis mu/ be consi/5t 
) ga9s recogniz$ 9 deem$ realization    
7,a7 ,prop]ty acquir$ f dec$5t ,section 
#ajad ( su* ,code1 z am5d$ by ! prec$+  
provisions ( ?is ,act1 is am5d$ by add+ 
at ! end ! foll[+ new subsection3  7h7  
,basis mu/ be consi/5t ) ga9s recogniz$ 

9 deem$ realization ,! basis ( any      
prop]ty to :i* subsection 7a7 applies   
%all n exce$ ! am\nt = :i* ! prop]ty 0  
treat$ z sold "u section #abfa4  4  7,b7
 ,prop]ty acquir$ by gift ,section #ajae
 ( su* ,code is am5d$ by add+ at ! end !
 foll[+ new subsection3  7f7 ,basis mu/ 
be consi/5t ) ga9s recogniz$ 9 deem$    
realization ,! basis ( any prop]ty to   
:i* subsection 7a77#b7 applies %all n   
exce$ ! am\nt = :i* ! prop]ty 0 treat$ z
 sold "u section #abfa4  4  7d7 ,con=m+ 
am5dm5ts  7#a7 ,section #gdgg7;a7 ( su* 
,code is am5d$ by /rik+ *apt] #ab &     
ins]t+ *apt] #a or #ab4  7#b7 ,section  
#geag7;a7 ( su* ,code is am5d$ by /rik+ 
*apt] #aa & ins]t+ *apt] #a1 #aa4  7e7  
,effective date ,! am5dm5ts made by ?is 
section %all apply to transf]s by gift  
7includ+ transf]s treat$ z gifts by     
reason ( ! am5dm5ts made by ?is         
section71 or at dea? by dec$5ts dy+1    
aft] ,decemb] #ca1 #bjba4  #b4          
,exclusion ( c]ta9 am\nts ( realiz$     
capital ga9  7a7 ,9 g5]al ,"p ,,iii (   

sub*apt] ,b ( *apt] #a ( ! ,int]nal     
,rev5ue ,code ( #aihf is am5d$ by ins]t+
 be=e section #adj ! foll[+ new section3
  #aci;,i4 ,exclusion ( ga9 f transf]s (
 appreciat$ assets at dea?  7a7 ,9 g5]al
 ,gross income %all n include s mu* ( ! 
net capital ga9 = ! taxable ye> f       
transf]s at dea? to :i* #abfa7;a7       
applies z does n exce$ #a1jjj1jjj4  7b7 
,inflation adju/m5t  7#a7 ,9 g5]al ,9 ! 
case ( any taxable ye> beg9n+ aft]      
#bjbb1 ! #a1jjj1jjj am\nt 9 subsection  
7a7 %all be increas$ by an am\nt equal  
to-- 7,a7 su* doll> am\nt1 multipli$ by 
7,b7 ! co/-(-liv+ adju/m5t det]m9$ "u   
section #a7;f77#c7 = ! cal5d> ye> 9 :i* 
! taxable ye> beg9s1 det]m9$ by         
sub/itut+ 9 subp>agraph 7,a77ii7 !re(   
cal5d> ye> #bjba = cal5d> ye> #bjaf4    
7#b7 ,r\nd+ ,if ! doll> am\nt 9         
subsection 7a71 aft] be+ increas$ "u    
p>agraph 7#a71 is n a multiple (        
#aj1jjj1 su* am\nt %all be r\nd$ to !   
next l[e/ multiple ( #aj1jjj4  4  7b7   
,cl]ical am5dm5t ,! table ( sections =  

"p ,,iii ( sub*apt] ,b ( *apt] #a ( su* 
,code is am5d$ by ins]t+ aft] section   
#aci;,h ! foll[+ new item3  ,sec4       
#aci;,i4 ,exclusion ( ga9 f transf]s (  
appreciat$ assets at dea?4  4  7c7      
,effective date ,! am5dm5ts made by ?is 
section %all apply to transf]s at dea?  
by dec$5ts dy+ aft] ,decemb] #ca1 #bjba1
 9 taxable ye>s beg9n+ aft] su* date4   
#c4 ,in=mation report+ ( c]ta9 gifts    
7a7 ,9 g5]al ,subp>t ,b ( "p ,,iii (    
sub*apt] ,a ( *apt] #fa ( ! ,int]nal    
,rev5ue ,code ( #aihf is am5d$ by add+  
at ! end ! foll[+ new section3  #fjej,z4
 ,returns relat+ to c]ta9 gifts &       
beque/s  7a7 ,9 g5]al ,9 ! case ( an    
applicable transf]1 ! individual mak+   
su* gift1 or ! executor 9 ! case ( a    
transf] at dea?1 %all furni% to !       
,secret>y ! foll[+ in=mation3 7#a7 ,! "n
 & taxpay] id5tification numb] ( ! p]son
 to :om su* transf] 0 made4  7#b7 ,a    
description ( ! prop]ty transf]r$4  7#c7
 ,! fair m>ket value ( ! prop]ty        
transf]r$ & ! basis ( su* prop]ty to !  

transf]ee4  7b7 ,applicable transf]     
7#a7 ,9 g5]al ,= purposes ( ?is section1
 ! t]m applicable transf] means-- 7,a7  
any gift 7o!r ?an a cov]$ security 7z   
def9$ 9 section #fjde7;g77#c777 :i* is  
tak5 into acc\nt "u section #abfa1 &    
7,b7 s mu* ( any transf] at dea? 7o!r   
?an su* a cov]$ security7 :i* is s tak5 
into acc\nt "u section #abfa & ! ga9 f  
:i* is includible 9 gross income = !    
taxable ye> ( su* transf]4  7#b7 ,de    
m9imis  7,a7 ,gifts ,= gifts n exce$+ ! 
limitation = su* ye> "u section         
#bejc7;b7 & n tak5 into acc\nt "u       
section #abfa1 see subsection 7d7 !re(4 
7,b7 ,transf]s at dea? ,= am\nt ( ga9   
exclud$ f gross income 9 case ( a       
transf] at dea?1 see section #aci;,i7a74
  7c7 ,/atem5ts ,to be furni%$ to p]sons
 ) respect to :om in=mation is requir$  
,e p]son requir$ to make a return "u    
subsection 7a7 %all furni% to ea* p]son 
^: "n is requir$ to set =? 9 su* return 
a writt5 /atem5t %[+ ! in=mation        
describ$ 9 subsection 7a74  7d7 ,tim+ ,!

 returns & /atem5ts requir$ "u ?is      
section %all be furni%$ at su* "t & 9   
su* =m & mann] z ! ,secret>y %all by    
regulation prescribe4  4  7b7 ,cl]ical  
am5dm5t ,! table ( sections = subp>t ,b 
( "p ,,iii ( sub*apt] ,a ( *apt] #fa (  
su* ,code is am5d$ by add+ at ! end !   
foll[+ new item3  ,sec4 #fjej,z4        
,returns relat+ to c]ta9 gifts4  4  7c7 
,effective date ,! am5dm5ts made by ?is 
section %all apply to transf]s aft]     
,decemb] #ca1 #bjba1 9 taxable ye>s     
beg9n+ aft] su* date4  #d4 ,ext5sion (  
"t = paym5t ( tax  7a7 ,ext5sion ( "t   
7#a7 ,9 g5]al ,sub*apt] ,b ( *apt] #fb (
 ! ,int]nal ,rev5ue ,code ( #aihf is    
am5d$ by add+ at ! end ! foll[+ new     
section3  #fafh4 ,ext5sion ( "t = paym5t
 ( capital ga9s on c]ta9 assets realiz$ 
by reason ( dea?  7a7 #g-,ye> in/allm5t 
paym5t  7#a7 ,9 g5]al ,9 ! case ( any   
ga9 ) respect to eligible prop]ty t is  
recogniz$ "u section #abfa by reason ( !
 dea? ( ! taxpay]1 ! taxpay] may elect  
to pay "p or all ( tax impos$ on su* ga9

 9 #b or m 7b n exce$+ #g7 equal        
in/allm5ts4  7#b7 ,date = paym5t (      
in/allm5ts ,if an election is made "u   
p>agraph 7#a71 ! fir/ in/allm5t %all be 
paid n lat] ?an ! date on :i* ! tax = ! 
taxable ye> 9 :i* ! ga9 describ$ 9      
p>agraph 7#a7 occurs is due1 & ea*      
succe$+ in/allm5t %all be paid on or    
be=e ! date :i* is #a ye> aft] ! date   
prescrib$ by ?is p>agraph = paym5t ( !  
prec$+ in/allm5t4  7b7 ,eligible capital
 asset ,= purposes ( ?is section1 ! t]m 
eligible prop]ty means any prop]ty o!r  
?an p]sonal prop]ty ( a type :i* is     
actively trad$ 7)9 ! mean+ ( section    
#ajib7;d77#a774  7c7 ,portion ( tax     
eligible ,! am\nt ( tax to :i* ?is      
section applies %all n exce$ ! excess   
(-- 7#a7 ! tax comput$ "u *apt] #a      
7det]m9$ aft] application ( section     
#abfa71 ov]  7#b7 ! tax comput$ "u *apt]
 #a 7det]m9$ )\t reg>d to section       
#abfa74  7d7 ,election ,any election "u 
subsection 7a7 %all be made n lat] ?an !
 "t prescrib$ by section #fjgb = fil+ ! 

return ( tax impos$ "u *apt] #a 7includ+
 ext5sions !re(71 & %all be made 9 su*  
mann] z ! ,secret>y %all by regulations 
prescribe4 ,if an election "u subsection
 7a7 is made1 ! provisions ( ?is        
subtitle %all apply z ?\gh ! ,secret>y 7
 ext5d+ ! "t = paym5t ( ! tax4  7e7     
,proration ( defici5cy to in/allm5ts ,if
 an election is made "u subsection 7a7  
to pay any "p ( ! tax impos$ "u *apt] #a
 9 in/allm5ts & a defici5cy has be5     
assess$1 ! defici5cy %all 7subject to ! 
limitation provid$ by subsection        
7a77#b77 be prorat$ to ! in/allm5ts     
payable "u subsection 7a74 ,! "p ( !    
defici5cy s prorat$ to any in/allm5t !  
date = paym5t ( :i* has n arriv$ %all be
 collect$ at ! same "t z1 & z a "p (1   
su* in/allm5t4 ,! "p ( ! defici5cy s    
prorat$ to any in/allm5t ! date = paym5t
 ( :i* has arriv$ %all be paid ^u notice
 & dem& f ! ,secret>y4 ,?is subsection  
%all n apply if ! defici5cy is due to   
neglig5ce1 to int5tional disreg>d (     
rules & regulations1 or to fraud ) int5t

 to evade tax4  7f7 ,"t = paym5t (      
int]e/ ,if ! "t = paym5t ( any am\nt (  
tax has be5 ext5d$ "u ?is section1      
int]e/ payable "u section #ffja on any  
unpaid portion %all be paid annually at 
! same "t z1 & z "p (1 ea* in/allm5t    
paym5t ( ! tax4  7g7 ,regulations ,!    
,secret>y %all prescribe su* regulations
 z may be necess>y to ! application (   
?is section4  7h7 ,cross-,ref]5ces  7#a7
 ,security ,= au?ority ( ! ,secret>y to 
require security 9 ! case ( an ext5sion 
"u ?is section1 see section #fafe4  7#b7
 ,int]e/ ,= provisions relat+ to int]e/ 
on tax payable 9 in/allm5ts "u ?is      
section1 see subsection 7k7 ( section   
#ffja4  4  7#b7 ,coord9ation ) transf]ee
 liability ,section #faji ( su* ,code is
 am5d$ by r$esignat+ subsections 7g71   
7h71 & 7i7 z subsections 7h71 7i71 &    
7j71 respectively1 & by ins]t+ aft]     
subsection 7f7 ! foll[+ new subsection3 
7g7 ,p]iod ( assessm5t 9 case ( ext5sion
 ( "t = paym5t ( tax "u section #abfa ,=
 purposes ( subsection 7c71 ! p]iod (   

limitation = assessm5t aga9/ ! transf]or
 ( any tax impos$ "u section #abfa !    
paym5t ( :i* is ext5d$ "u section #fafh 
%all n be treat$ z expir+ e>li] ?an !   
due date = ! la/ paym5t "u 7a77#b7 ( su*
 section4  4  7#c7 ,cl]ical am5dm5t ,!  
table ( sections = subp>t ,b ( *apt] #fb
 ( su* ,code is am5d$ by add+ at ! end !
 foll[+ new item3  ,sec4 #fafh4         
,ext5sion ( "t = paym5t ( capital ga9s  
on c]ta9 assets realiz$ by reason (     
dea?4  4  7b7 ,int]e/ ,section #ffja (  
su* ,code is am5d$ by r$esignat+        
subsection 7k7 z subsection 7l7 & by    
ins]t+ aft] subsection 7j7 ! foll[+ new 
subsection3  7k7 ,special rate = tax    
ext5d$ "u section #fafh ,if ! "t =      
paym5t ( an am\nt ( tax impos$ by       
section #abfa is ext5d$ z provid$ 9     
section #fafh1 9 lieu ( ! annual rate   
provid$ by subsection 7a71 int]e/ %all  
be paid at a rate equal to #de p]c5t ( !
 annual rate provid$ by subsection 7a74 
,= purposes ( ?is subsection1 ! am\nt ( 
any defici5cy :i* is prorat$ to         

in/allm5ts payable "u section #fafh %all
 be treat$ z an am\nt ( tax payable 9   
in/allm5ts "u su* section4  4  7c7      
,effective date ,! am5dm5ts made by ?is 
section %all apply to taxable ye>s      
beg9n+ aft] ,decemb] #ca1 #bjba4