The Death Tax Repeal Act would eliminate the federal estate tax and the generation-skipping transfer (GST) tax, effective for estates and transfers occurring after the bill’s enactment. It also makes corresponding changes to gift tax rules to align with the repeal of estate and GST taxes. Specifically, the bill adds termination provisions for the estate and GST taxes, and rewrites the gift-tax framework to reflect a very large, inflation-adjusted lifetime exemption and a new rate structure. The act includes transitional rules to manage how the old and new rules apply to transactions around the enactment date. In short, the bill aims to end the federal taxes on wealth passed at death (and to skip-generation transfers), while reshaping gift-tax rules to fit a system without an estate or GST tax. Sponsored by Rep. Feenstra and a broad group of co-sponsors, the bill would enact these changes through amendments to the Internal Revenue Code, with immediate effect on new estates, GST transfers, and gifts made after enactment, plus specific transition provisions for earlier arrangements.
Key Points
- 1Estate tax repeal: The estate tax would be terminated for decedents dying on or after enactment, with a specific provision clarifying how related rules (e.g., distributions from certain trusts) apply in the transition period.
- 2Generation-skipping transfer tax repeal: The GST tax would be terminated for generation-skipping transfers occurring on or after enactment.
- 3Gift tax conforming amendments: The bill rewrites how gift tax is computed and introduces a large, inflation-adjusted lifetime gift exemption (initially linked to a $10,000,000 baseline, adjusted annually for inflation). It also adjusts the gift tax rate schedule and related provisions to align with the repeal of estate and GST taxes.
- 4Transition and effective date: The amendments apply to estates dying, GST transfers, and gifts made on or after enactment, with a transition rule to handle how the new law interacts with the old rules around the enactment date.
- 5Administrative references: The bill adds a new “Terminations” section for both the estate tax (Sec. 2210) and GST tax (Sec. 2664) and makes clerical amendments to reflect the repeal in the Code’s structure.