Sec. 409. Surcharge on high income estates and trusts
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Subchapter A of chapter 1 is amended by adding at the end the following new part: Sec. 59B. Surcharge on high income estates and trusts. In the case of an estate or trust, there is hereby imposed (in addition to any other tax imposed by this subtitle) a tax equal to the sum of— 5 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $200,000, plus 3 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $500,000. For purposes of this section— The term modified adjusted gross income means adjusted gross income reduced by any deduction (not taken into account in determining adjusted gross income) allowed for investment interest (as defined in section 163(d)) or business interest (as defined in section 163(j)).
Adjusted gross income shall be determined as provided in section 67(e) and reduced by the amount allowed as a deduction under section 642(c). Subsection
(a)shall not apply to a trust all the unexpired interests in which are devoted to one or more of the purposes described in section 170(c)(2)(B). The tax imposed under this section shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit under this chapter (other than sections 27 and 901) or for purposes of section 55. For purposes of the determination of adjusted gross income, section 641(c)(1)(A) shall not apply and all portions of any electing small business trust shall be treated as a single trust. The Secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including regulations or other guidance to prevent the avoidance of the purposes of this section. . Section 453A(c) is amended by redesignating paragraph
(6)as paragraph
(7)and by inserting after paragraph
(5)the following new paragraph: For purposes of paragraph (3)(B), in the case of an estate or trust, the maximum rate of tax in effect under section 1 shall be treated as being equal to the sum of such rate and the rates in effect under paragraphs
(1)and
(2)of section 59B(a). . Section 904(b)(3)(E)(i)(I) is amended by inserting increased, in the case of an estate or trust, by the sum of the rates set forth in paragraphs
(1)and
(2)of section 1A(a) after (whichever applies) . Section 904(d)(2)(F) is amended by adding at the end the following: For purposes of the first sentence of this subparagraph, in the case of an estate or trust, the highest rate of tax specified in section 1 shall be treated as being equal to the sum of such rate and the rates in effect under paragraphs
(1)and
(2)of section 59B(a). . Section 962(a)(1) is amended by striking and 55 and inserting 55, and 59B . Section 1291(c)(2) is amended by adding at the end the following: For purposes of the preceding sentence, in the case of an estate or trust, the highest rate of tax in effect under section 1 shall be treated as being equal to the sum of such rate and the rates in effect under paragraphs
(1)and
(2)of section 59B(a). . Section 1446(b)(2) is amended by adding at the end the following flush sentence: For purposes of subparagraph (A), in the case of a partner which is an estate or trust, the highest rate of tax in effect under section 1 shall be treated as being equal to the sum of such rate and the rates in effect under paragraphs
(1)and
(2)of section 59B(a). . Section 6225(b)(1) is amended by adding at the end the following flush sentence: For purposes of subparagraph (B), in the case of an estate or trust, the highest rate of tax in effect under section 1 shall be treated as being equal to the sum of such rate and the rates in effect under paragraphs
(1)and
(2)of section 59B(a). . Section 6225(c)(4)(A) is amended— by striking subsection (b)(1)(A) and inserting subsection (b)(1)(B) , and by striking or at the end of clause (i), by adding or at the end of clause (ii), and by inserting after clause
(ii)the following new clause: is not an estate or trust subject to one or both of the rates of tax in effect under paragraphs
(1)and
(2)of section 59B(a), . The second sentence of section 7519(b) is amended by inserting and, in the case of an estate or trust, increased by the sum of the rates in effect under paragraphs
(1)and
(2)of section 59B(a) before the period at the end. The table of parts for subchapter A of chapter 1 is amended by adding at the end the following new item: PART VIII—Surcharge on high income estates and trusts . The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.