,,ii  #aaith ,,congress  #b;d ,session  
,s4 #dabb  ,,in ,,the ,,senate ,,of     
,,the ,,united ,,states  ,march #ag1    
#bjbf,mr4 ,markey 7for himself1 ,mr4    
,sanders1 ,mr4 ,merkley1 and ,mr4       
,booker7 introduced the following bill2 
which was read twice and referred to the
 ,committee on ,finance  ,a ,,bill  ,to 
amend the ,internal ,revenue ,code of   
#aihf to equalize treatment of capital  
gains and earned income4  #a4 ,short    
title ,this ,act may be cited as the    
,equal ,tax ,act4  #b4 ,preferential    
rates for dividends and capital gains   
limited to incomes of #a1jjj1jjj or less
  7a7 ,in general ,section #a7;h7 of the
 ,internal ,revenue ,code of #aihf is   
amended by inserting on so much of such 
gain as does not cause the taxable      
income of the taxpayer to exceed        
#a1jjj1jjj 7computed after taking into  
account all other taxable income of the 
taxpayer7 after the tax imposed by this 
section for such taxable year4  7b7     
,treatment of qualifying family farm or 

business ,section #a7;h7 of such ,code1 
as amended by subsection 7a71 is further
 amended by inserting and without regard
 to gain realized from the transfer by  
gift or bequest of a qualifying family  
farm or business described in section   
#aci,m7c7 after all other taxable income
 of the taxpayer4  7c7 ,effective date  
,the amendments made by this section    
shall apply to taxable years beginning  
after ,december #ca1 #bjbf4  #c4 ,deemed
 realization of capital gains at time of
 gift or death  7a7 ,treatment as sale  
7#a7 ,in general ,part ,,iv of          
subchapter ,p of chapter #a of the      
,internal ,revenue ,code of #aihf is    
amended by adding at the end the        
following new section3  #abfa4 ,gains   
from certain property transferred by    
gift or upon death  7a7 ,in general ,any
 property which is transferred by gift  
or at death shall be treated as sold for
 its fair market value on the date of   
such gift or death4  7b7 ,exceptions    
7#a7 ,spouse or surviving spouse ,this  

section shall not apply to a transfer of
 property to the spouse or surviving    
spouse of the transferor 7or to a       
qualified spousal trust74  7#b7 ,certain
 tangible personal property ,in the case
 of tangible personal property1 this    
section shall only apply to the         
following3 7,a7 ,property held in       
connection with a trade or business4    
7,b7 ,property held for investment4     
7,c7 ,collectibles 7as defined in       
section #djh7m7 7determined without     
regard to paragraph 7#c7 thereof774     
7#c7 ,charitable contributions ,this    
section shall not apply to any transfer 
to an organization described in section 
#agj7;c74  7c7 ,special rules for trusts
  7#a7 ,certain grantor trusts ,in the  
case of any property which-- 7,a7 is    
held in a trust of which the grantor or 
another person is treated as the owner  
under subpart ,e of part ,i of          
subchapter ,j of chapter #a1 and  7,b7  
is includible in the gross estate of the
 grantor or such other person under     

chapter #aa1  such property shall be    
treated as transferred under subsection 
7a7 when the grantor or such other      
person ceases to be treated as the owner
 of such property1 or such property     
ceases to be includible in the gross    
estate of the grantor or such other     
person 7including by reason of the death
 of the grantor or such other person1 or
 the distribution of such property to a 
person other than the grantor or such   
other person74  7#b7 ,other trusts ,in  
the case of any property held in trust  
and not described in paragraph 7#a71    
such property shall be treated as       
transferred under subsection 7a7 upon   
the transfer of such property to a      
trust4  7#c7 ,transfers from and        
modifications of trusts ,the ,secretary 
may by regulation prescribe such rules  
to treat the modification of the terms  
of a trust or the transfer or           
distribution of trust assets 7including 
to another trust7 as a transfer         
described in subsection 7a7 as are      

necessary or appropriate to prevent the 
avoidance of this section4  7#d7        
,generation-skipping trusts ,at the end 
of each #cj-year period for which any   
property is continuously held in trust  
7other than property described in       
paragraph 7#a771 such property shall be 
treated as transferred pursuant to      
subsection 7a74  7#e7 ,qualifying       
spousal trust  7,a7 ,in general ,the    
property of a qualifying spousal trust  
shall be treated as transferred under   
subsection 7a7-- 7i7 upon the death of  
the spousal beneficiary1  7ii7 upon the 
distribution of such property from such 
trust to any person other than the      
spousal beneficiary1 or  7iii7 at such  
time such property ceases to be held by 
a qualifying spousal trust4  7,b7       
,qualifying spousal trust ,for purposes 
of this section1 a trust is a qualifying
 spousal trust if-- 7i7 the sole        
beneficiary of such trust is the spouse1
 or surviving spouse of the transferor1 
or  7ii7 such spouse or surviving spouse

 is the sole life tenant1 or sole income
 beneficiary1 of such trust4  7d7       
,exclusion of certain gifts ,in the case
 of gifts 7other than gifts of future   
interests in property7 made to any      
person during the taxable year1 so much 
of the dollar amount of such gifts to   
such person as does not exceed the      
amount in effect for the calendar year  
under section #bejc7;b7 in which the    
taxable year begins shall not be taken  
into account under subsection 7a7 for   
such taxable year4 ,where there has been
 a transfer to any person of a present  
interest in property1 the possibility   
that such interest may be diminished by 
the exercise of a power shall be        
disregarded in applying this subsection1
 if no part of such interest will at any
 time pass to any other person4  7e7    
,regulations ,the ,secretary shall      
prescribe such regulations as may be    
necessary to prevent the avoidance of   
the purposes of this section4  4  7#b7  
,clerical amendment ,the table of       

sections for part ,,iv of subchapter ,p 
of chapter #a of such ,code is amended  
by adding at the end the following new  
item3  ,sec4 #abfa4 ,gains from certain 
property transferred by gift or upon    
death4  4  7b7 ,coordination of related 
party loss rules ,section #bfg of such  
,code is amended by adding at the end   
the following new subsection3  7h7      
,property treated as sold at death      
,subsection 7a77#a7 shall not apply to  
any property that is transferred at     
death and treated as sold under section 
#abfa4  4  7c7 ,treatment of basis for  
gifts and bequests to which tax applies 
7#a7 ,elimination of carryover basis for
 gifts ,section #ajae7;a7 of such ,code 
is amended-- 7,a7 by striking ,if the   
property and inserting the following3   
7#a7 ,gifts before ,january #a1 #bjbg   
,if the property  2  7,b7 by inserting 1
 and before ,january #a1 #bjbg after    
after ,december #ca1 #aibj2 and  7,c7 by
 adding at the end the following new    
paragraph3  7#b7 ,gifts after ,december 

#ca1 #bjbf ,if the property was acquired
 by gift after ,december #ca1 #bjbf1 the
 basis shall be the fair market value of
 such property at the time of the gift4 
4  7#b7 ,rules for transfers between    
spouses  7,a7 ,in general ,section      
#ajda7;b7 of such ,code is amended to   
read as follows3  7b7 ,transferee has   
transferor's basis ,in the case of any  
transfer of property described in       
subsection 7a71 the basis of the        
transferee in the property shall be the 
adjusted basis of the transferor4  4    
7,b7 ,transfers at death ,section       
#ajda7;a7 of such ,code is amended by   
inserting 7including at death7 after    
transfer of property4  7,c7 ,conforming 
amendments  7i7 ,section #ajad of such  
,code is amended by adding at the end   
the following new subsection3  7g7      
,property acquired from decedent spouse 
,in the case of property which passes   
from the decedent to 7or in trust for   
the benefit of7 the decedent's surviving
 spouse in a transfer described in      

section #ajda7;a77#a71 the basis of such
 property in the hands of the transferee
 shall be determined under section      
#ajda7;b7 and not this section4  4  7ii7
 ,section #ajae7;e7 of such ,code is    
amended by striking #ajda7;b77#b7 and   
inserting #ajda7;b74  7#c7 ,basis must  
be consistent with gains recognized in  
deemed realization  7,a7 ,property      
acquired from decedent ,section #ajad of
 such ,code1 as amended by the preceding
 provisions of this ,act1 is amended by 
adding at the end the following new     
subsection3  7h7 ,basis must be         
consistent with gains recognized in     
deemed realization ,the basis of any    
property to which subsection 7a7 applies
 shall not exceed the amount for which  
the property was treated as sold under  
section #abfa4  4  7,b7 ,property       
acquired by gift ,section #ajae of such 
,code is amended by adding at the end   
the following new subsection3  7f7      
,basis must be consistent with gains    
recognized in deemed realization ,the   

basis of any property to which          
subsection 7a77#b7 applies shall not    
exceed the amount for which the property
 was treated as sold under section      
#abfa4  4  7d7 ,conforming amendments   
7#a7 ,section #gdgg7;a7 of such ,code is
 amended by striking chapter #ab and    
inserting chapter #a or #ab4  7#b7      
,section #geag7;a7 of such ,code is     
amended by striking chapter #aa and     
inserting chapter #a1 #aa4  7e7         
,effective date ,the amendments made by 
this section shall apply to transfers by
 gift1 or at death by decedents dying1  
after ,december #ca1 #bjbf4  #d4        
,exclusion of certain amounts of        
realized capital gain  7a7 ,in general  
,part ,,iii of subchapter ,b of chapter 
#a of the ,internal ,revenue ,code of   
#aihf is amended by inserting before    
section #adj the following new section3 
#aci,m4 ,exclusion of gain from         
transfers of appreciated assets at death
  7a7 ,in general ,gross income shall   
not include-- 7#a7 so much of the net   

capital gain for the taxable year from  
transfers at death to which #abfa7;a7   
applies as does not exceed #a1jjj1jjj1  
and  7#b7 in the case of property that  
is a qualifying family farm or business 
that meets the certification requirement
 of subsection 7d71 #ej percent of so   
much of any gain from a transfer        
described in paragraph 7#a7 as exceeds  
#a1jjj1jjj4  7b7 ,inflation adjustment  
7#a7 ,in general ,in the case of any    
taxable year beginning after #bjbg1 the 
#a1jjj1jjj amounts in subsection 7a7    
shall be increased by an amount equal   
to-- 7,a7 such dollar amount1 multiplied
 by  7,b7 the cost-of-living adjustment 
determined under section #a7;f77#c7 for 
the calendar year in which the taxable  
year begins1 determined by substituting 
in subparagraph 7,a77ii7 thereof        
calendar year #bjbf for calendar year   
#bjaf4  7#b7 ,rounding ,if the dollar   
amount in subsection 7a71 after being   
increased under paragraph 7#a71 is not a
 multiple of #aj1jjj1 such amount shall 

be rounded to the next lowest multiple  
of #aj1jjj4  7c7 ,definitions ,for      
purposes of this section-- 7#a7         
,qualifying family farm or business ,the
 term qualifying family farm or business
 means real property located in the     
,united ,states if during periods       
aggregating #c years or more of the     
#e-year period ending on the date of the
 bequest of such real property1 such    
real property was used as a farm for    
farming purposes or a family business4  
7#b7 ,other definitions ,the terms farm 
and farming purposes1 and material      
participation have the respective       
meanings given such terms by paragraphs 
7#d7 and 7#e7 of section #bjcb;,a7e71   
respectively4  7d7 ,use certification as
 farm for farming purposes or family    
business ,the certification requirement 
of this subsection is a certification   
that the use of the qualifying family   
farm or business referred to in         
subsection 7a7 will be as a farm for    
farming purposes or family business 7as 

the case may be7 for not less than the  
#abj-month period beginning on the date 
of the bequest referred to in subsection
 7a74  7e7 ,special rules ,for purposes 
of this section1 the following rules    
shall apply3 7#a7 ,rules similar to the 
rules of subsections 7e7 and 7f7 of     
section #aba4  7#b7 ,rules similar to   
the rules of paragraphs 7#d7 and 7#e7 of
 section #bjcb;,a7b7 and paragraph 7#c7 
of section #bjcb;,a7e74  7f7 ,treatment 
of disposition or change in use of      
property  7#a7 ,in general ,if1 as of   
the close of any taxable year1 there is 
a recapture event with respect to any   
qualifying family farm or business      
transferred to the taxpayer in a bequest
 described in subsection 7a71 then the  
tax of the taxpayer under this chapter  
for such taxable year shall be increased
 by an amount equal to the product of-- 
7,a7 the amount determined by dividing--
 7i7 the amount of gain excluded from   
gross income of the taxpayer under      
subsection 7a77#b7 on the date such     

property was transferred to the         
taxpayer1 over  7ii7 #abj1 and  7,b7 the
 number of full months remaining in the 
#abj-month term described in subsection 
7d7 as of the date of such recapture    
event4  7#b7 ,recapture event defined   
,for purposes of this subsection1 the   
term recapture event means-- 7,a7       
,cessation of operation ,the cessation  
of the operation of any property the    
sale or exchange of which to the        
taxpayer is described in subsection 7a7 
as a qualifying family farm or business4
  7,b7 ,change in ownership  7i7 ,in    
general ,except as provided in clause   
7ii71 the disposition of a taxpayer's   
interest in any property the sale or    
exchange of which to the taxpayer is    
described in subsection 7a74  7ii7      
,agreement to assume recapture liability
 ,clause 7i7 shall not apply if the     
person acquiring such interest in the   
property agrees in writing to assume the
 recapture liability of the person      
disposing of such interest in effect    

immediately before such disposition4 ,in
 the event of such an assumption1 the   
person acquiring the interest in the    
property shall be treated as the        
taxpayer for purposes of assessing any  
recapture liability 7computed as if     
there had been no change in ownership74 
7#c7 ,special rules  7,a7 ,no credits   
against tax ,any increase in tax under  
this subsection shall not be treated as 
a tax imposed by this chapter for       
purposes of determining the amount of   
any credit under subpart ,a1 ,b1 or ,d  
of part ,,iv of subchapter ,a4  7,b7 ,no
 recapture by reason of hardship ,the   
increase in tax under this subsection   
shall not apply to any disposition of   
property or cessation of the operation  
of any property as a farm for farming   
purposes by reason of any hardship as   
determined by the ,secretary4  4  7b7   
,clerical amendment ,the table of       
sections for part ,,iii of subchapter ,b
 of chapter #a of such ,code is amended 
by inserting before the item relating to

 section #adj the following new item3   
,sec4 #aci,m4 ,exclusion of gain from   
transfers of appreciated assets at      
death4  4  7c7 ,effective date ,the     
amendments made by this section shall   
apply to transfers at death by decedents
 dying after ,december #ca1 #bjbf1 in   
taxable years beginning after such date4
  #e4 ,information reporting of certain 
gifts  7a7 ,in general ,subpart ,b of   
part ,,iii of subchapter ,a of chapter  
#fa of the ,internal ,revenue ,code of  
#aihf is amended by adding at the end   
the following new section3  #fjej;,,bb4 
,returns relating to certain gifts and  
bequests  7a7 ,in general ,in the case  
of an applicable transfer1 the          
individual making such gift1 or the     
executor in the case of a transfer at   
death1 shall furnish to the ,secretary  
the following information3 7#a7 ,the    
name and taxpayer identification number 
of the person to whom such transfer was 
made4  7#b7 ,a description of the       
property transferred4  7#c7 ,the fair   

market value of the property transferred
 and the basis of such property to the  
transferee4  7b7 ,applicable transfer   
7#a7 ,in general ,for purposes of this  
section1 the term applicable transfer   
means-- 7,a7 any gift 7other than a     
covered security 7as defined in section 
#fjde7;g77#c777 which is taken into     
account under section #abfa1 and  7,b7  
so much of any transfer at death 7other 
than such a covered security7 which is  
so taken into account under section     
#abfa and the gain from which is        
includible in gross income for the      
taxable year of such transfer4  7#b7 ,de
 minimis  7,a7 ,gifts ,for gifts        
exceeding the limitation for such year  
under section #bejc7;b7 and not taken   
into account under section #abfa1 see   
subsection 7d7 thereof4  7,b7 ,transfers
 at death ,for amount of gain excluded  
from gross income in case of a transfer 
at death1 see section #aci,m7a74  7c7   
,statements ,to ,be furnished to persons
 with respect to whom information is    

required ,every person required to make 
a return under subsection 7a7 shall     
furnish to each person whose name is    
required to set forth in such return a  
written statement showing the           
information described in subsection 7a74
  7d7 ,timing ,the returns and          
statements required under this section  
shall be furnished at such time and in  
such form and manner as the ,secretary  
shall by regulation prescribe4  4  7b7  
,clerical amendment ,the table of       
sections for subpart ,b of part ,,iii of
 subchapter ,a of chapter #fa of such   
,code is amended by adding at the end   
the following new item3  ,sec4          
#fjej;,,bb4 ,returns relating to certain
 gifts4  4  7c7 ,effective date ,the    
amendments made by this section shall   
apply to transfers after ,december #ca1 
#bjbf1 in taxable years beginning after 
such date4  #f4 ,extension of time for  
payment of tax  7a7 ,extension of time  
7#a7 ,in general ,subchapter ,b of      
chapter #fb of the ,internal ,revenue   

,code of #aihf is amended by adding at  
the end the following new section3      
#fafh4 ,extension of time for payment of
 capital gains on certain assets        
realized by reason of death  7a7        
#e-,year installment payment  7#a7 ,in  
general ,in the case of any gain with   
respect to eligible property that is    
recognized under section #abfa by reason
 of the death of the taxpayer1 the      
taxpayer may elect to pay part or all of
 tax imposed on such gain in #b or more 
7but not exceeding #e7 equal            
installments4  7#b7 ,date for payment of
 installments ,if an election is made   
under paragraph 7#a71 the first         
installment shall be paid not later than
 the date on which the tax for the      
taxable year in which the gain described
 in paragraph 7#a7 occurs is due1 and   
each succeeding installment shall be    
paid on or before the date which is #a  
year after the date prescribed by this  
paragraph for payment of the preceding  
installment4  7b7 ,eligible capital     

asset ,for purposes of this section1 the
 term eligible property means any       
property other than personal property of
 a type which is actively traded 7within
 the meaning of section #ajib7;d77#a774 
7c7 ,portion of tax eligible ,the amount
 of tax to which this section applies   
shall not exceed the excess of-- 7#a7   
the tax computed under chapter #a       
7determined after application of section
 #abfa71 over  7#b7 the tax computed    
under chapter #a 7determined without    
regard to section #abfa74  7d7 ,election
 ,any election under subsection 7a7     
shall be made not later than the time   
prescribed by section #fjgb for filing  
the return of tax imposed under chapter 
#a 7including extensions thereof71 and  
shall be made in such manner as the     
,secretary shall by regulations         
prescribe4 ,if an election under        
subsection 7a7 is made1 the provisions  
of this subtitle shall apply as though  
the ,secretary were extending the time  
for payment of the tax4  7e7 ,proration 

of deficiency to installments ,if an    
election is made under subsection 7a7 to
 pay any part of the tax imposed under  
chapter #a in installments and a        
deficiency has been assessed1 the       
deficiency shall 7subject to the        
limitation provided by subsection       
7a77#b77 be prorated to the installments
 payable under subsection 7a74 ,the part
 of the deficiency so prorated to any   
installment the date for payment of     
which has not arrived shall be collected
 at the same time as1 and as a part of1 
such installment4 ,the part of the      
deficiency so prorated to any           
installment the date for payment of     
which has arrived shall be paid upon    
notice and demand from the ,secretary4  
,this subsection shall not apply if the 
deficiency is due to negligence1 to     
intentional disregard of rules and      
regulations1 or to fraud with intent to 
evade tax4  7f7 ,time for payment of    
interest ,if the time for payment of any
 amount of tax has been extended under  

this section1 interest payable under    
section #ffja on any unpaid portion     
shall be paid annually at the same time 
as1 and as part of1 each installment    
payment of the tax4  7g7 ,regulations   
,the ,secretary shall prescribe such    
regulations as may be necessary to the  
application of this section4  7h7       
,cross-,references  7#a7 ,security ,for 
authority of the ,secretary to require  
security in the case of an extension    
under this section1 see section #fafe4  
7#b7 ,interest ,for provisions relating 
to interest on tax payable in           
installments under this section1 see    
subsection 7k7 of section #ffja4  4     
7#b7 ,coordination with transferee      
liability ,section #faji of such ,code  
is amended by redesignating subsections 
7g71 7h71 and 7i7 as subsections 7h71   
7i71 and 7j71 respectively1 and by      
inserting after subsection 7f7 the      
following new subsection3  7g7 ,period  
of assessment in case of extension of   
time for payment of tax under section   

#abfa ,for purposes of subsection 7c71  
the period of limitation for assessment 
against the transferor of any tax       
imposed under section #abfa the payment 
of which is extended under section #fafh
 shall not be treated as expiring       
earlier than the due date for the last  
payment under 7a77#b7 of such section4  
4  7#c7 ,clerical amendment ,the table  
of sections for subpart ,b of chapter   
#fb of such ,code is amended by adding  
at the end the following new item3      
,sec4 #fafh4 ,extension of time for     
payment of capital gains on certain     
assets realized by reason of death4  4  
7b7 ,interest ,section #ffja of such    
,code is amended by redesignating       
subsection 7k7 as subsection 7l7 and by 
inserting after subsection 7j7 the      
following new subsection3  7k7 ,special 
rate for tax extended under section     
#fafh ,if the time for payment of an    
amount of tax imposed by section #abfa  
is extended as provided in section      
#fafh1 in lieu of the annual rate       

provided by subsection 7a71 interest    
shall be paid at a rate equal to #de    
percent of the annual rate provided by  
subsection 7a74 ,for purposes of this   
subsection1 the amount of any deficiency
 which is prorated to installments      
payable under section #fafh shall be    
treated as an amount of tax payable in  
installments under such section4  4  7c7
 ,effective date ,the amendments made by
 this section shall apply to taxable    
years beginning after ,december #ca1    
#bjbf4  #g4 ,limitation on use of       
like-kind exchanges to avoid tax on real
 estate gains  7a7 ,limitation on       
nonrecognition of gain ,section         
#ajca7;a7 of the ,internal ,revenue     
,code of #aihf is amended by adding at  
the end the following new paragraph3    
7#d7 ,limitations  7,a7 ,annual         
limitation ,the amount of gain excluded 
from recognition under paragraph 7#a7   
with respect to any property of the     
taxpayer during the taxable year which  
is not qualified property shall not     

exceed #ejj1jjj4  7,b7 ,aggregate       
limitation ,the aggregate amount of gain
 excluded from recognition under        
subparagraph 7,a7 by the taxpayer for   
all taxable years shall not exceed      
#a1jjj1jjj4  7,c7 ,qualified property   
,for purposes of this paragraph1 the    
term qualified property means property--
 7i7 which is used for farming purposes1
 or  7ii7 which is exchanged for        
property that will serve the same       
specific purpose4  4  7b7 ,effective    
date ,the amendment made by this section
 shall apply to exchanges of real       
property after ,december #ca1 #bjbf4    
#h4 ,limitation on deduction for        
qualified business income  7a7 ,in      
general ,section #aii;,a7a77#b7 of the  
,internal ,revenue ,code of #aihf is    
amended-- 7#a7 in subparagraph 7,a71 by 
striking the taxable income of the      
taxpayer for the taxable year and       
inserting so much of the taxable income 
of the taxpayer for the taxable year as 
does not exceed #a1jjj1jjj1 and  7#b7 in

 subparagraph 7,b71 by striking the net 
capital gain 7as defined in section     
#a7;h77 of the taxpayer for such taxable
 year and inserting all income of the   
taxpayer for such taxable year other    
than qualified business income4  7b7    
,effective date ,the amendment made by  
this section shall apply to taxable     
years beginning after ,december #ca1    
#bjbf4