Estate and gift tax returned to 2009 levels

(a) Estate tax (1) Rate schedule The table contained in section 2001(c) of the Internal Revenue Code of 1986 is amended by striking the last row and inserting the following: Over $1,000,000 but not over $1,250,000 $345,800, plus 41 percent of the excess of such amount over $1,000,000. Over $1,250,000 but not over $1,500,000 $448,300, plus 43 percent of the excess of such amount over $1,250,000. Over $1,500,000 $555,800, plus 45 percent of the excess of such amount over $1,500,000. (2) Reduction of basic exclusion amount Paragraph (3) of section 2010(c) of the Internal Revenue Code of 1986 is amended to read as follows: (3) Basic exclusion amount For purposes of this subsection, the basic exclusion amount is $3,500,000.. (b) Gift tax (1) Limitation on basic exclusion amount for purposes of determining applicable credit amount Paragraph (1) of section 2505(a) of the Internal Revenue Code of 1986 is amended by inserting (determined as if the basic exclusion amount were $1,000,000 and the deceased spousal unused exclusion amount was modified under subsection (d)) after calendar year. (2) Modification of deceased spousal unused exclusion amount Section 2505 of such Code is amended by adding at the end the following: (d) Modification of deceased spousal unused exclusion amount In the case of a surviving spouse who is the last spouse of the decedent with respect to whom an election is made under section 2010(c)(5), the deceased spousal unused exclusion amount with respect to such surviving spouse shall be determined as if such amount were the lesser of— (1) $1,000,000, and (2) applicable exclusion amount of the decedent reduced by the amount with respect to which the tentative tax is determined under section 2001(b)(1) on the estate of the decedent.. (c) Effective date The amendments made by this section shall apply to estates of decedents dying and gifts made after December 31, 2026.