Sec. 101. PERMANENT EXTENSION AND MODIFICATION OF 2001 TAX RELIEF
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## SEC. 101 PERMANENT EXTENSION AND MODIFICATION OF 2001 TAX RELIEF ###
(a)Permanent Extension ####
(1)In general **[**[26 U.S.C. 1 note](/us/usc/t26/s1)**]** The Economic Growth and Tax Relief Reconciliation Act of 2001 is amended by striking title IX. ####
(2)Conforming amendment **[**[26 U.S.C. 121 note](/us/usc/t26/s121)**]** The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 is amended by striking section 304. ####
(3)Effective date **[**[26 U.S.C. 1 note](/us/usc/t26/s1)**]** The amendments made by this subsection shall apply to taxable, plan, or limitation years beginning after December 31, 2012, and estates of decedents dying, gifts made, or generation skipping transfers after December 31, 2012. ###
(b)Application of Income Tax to Certain High-Income Taxpayers ####
(1)Income tax rates #####
(A)Treatment of 25-, 28-, and 33-percent rate brackets **[**[26 U.S.C. 1](/us/usc/t26/s1)**]** Paragraph
(2)of section 1(i) is amended to read as follows: > > #### “(2) 25-, 28-, AND 33-PERCENT RATE BRACKETS > > The tables under subsections (a), (b), (c), (d), and
(e)shall be applied— > > > ##### “(A) > > by substituting ‘25%’ for ‘28%’ each place it appears (before the application of subparagraph (B)), > > > ##### “(B) > > by substituting ‘28%’ for ‘31%’ each place it appears, and > > > ##### “(C) > > by substituting ‘33%’ for ‘36%’ each place it appears.” > . #####
(B)35-PERCENT RATE BRACKET Subsection
(i)of section 1 is amended by redesignating paragraph
(3)as paragraph
(4)and by inserting after paragraph
(2)the following new paragraph: > > #### “(3) Modifications to income tax brackets for high-income taxpayers > > > ##### “(A) 35-PERCENT RATE BRACKET > > In the case of taxable years beginning after December 31, 2012— > > > ###### “(i) > > the rate of tax under subsections (a), (b), (c), and
(d)on a taxpayer’s taxable income in the highest rate bracket shall be 35 percent to the extent such income does not exceed an amount equal to the excess of— > > > ###### “(I) > > the applicable threshold, over > > > ###### “(II) > > the dollar amount at which such bracket begins, and > > > ###### “(ii) > > the 39.6 percent rate of tax under such subsections shall apply only to the taxpayer’s taxable income in such bracket in excess of the amount to which clause
(i)applies. > > > ##### “(B) Applicable threshold > > For purposes of this paragraph, the term ‘applicable threshold’ means— > > > ###### “(i) > > $450,000 in the case of subsection (a), > > > ###### “(ii) > > $425,000 in the case of subsection (b), > > > ###### “(iii) > > $400,000 in the case of subsection (c), and > > > ###### “(iv) > > ½ the amount applicable under clause
(i)(after adjustment, if any, under subparagraph (C)) in the case of subsection (d). > > > ##### “(C) Inflation adjustment > > For purposes of this paragraph, with respect to taxable years beginning in calendar years after 2013, each of the dollar amounts under clauses (i), (ii), and
(iii)of subparagraph
(B)shall be adjusted in the same manner as under paragraph (1)(C)(i), except that subsection (f)(3)(B) shall be applied by substituting ‘2012’ for ‘1992’.” > . ####
(2)Phaseout of personal exemptions and itemized deductions #####
(A)Overall limitation on itemized deductions **[**[26 U.S.C. 68](/us/usc/t26/s68)**]** Section 68 is amended— ######
(i)by striking subsection
(b)and inserting the following: > > ### “(b) Applicable Amount > > > #### “(1) In general > > For purposes of this section, the term ‘applicable amount’ means— > > > ##### “(A) > > $300,000 in the case of a joint return or a surviving spouse (as defined in section 2(a)), > > > ##### “(B) > > $275,000 in the case of a head of household (as defined in section 2(b)), > > > ##### “(C) > > $250,000 in the case of an individual who is not married and who is not a surviving spouse or head of household, and > > > ##### “(D) > > ½ the amount applicable under subparagraph
(A)(after adjustment, if any, under paragraph (2)) in the case of a married individual filing a separate return. > > For purposes of this paragraph, marital status shall be determined under section 7703. > > > #### “(2) Inflation adjustment > > In the case of any taxable year beginning in calendar years after 2013, each of the dollar amounts under subparagraphs (A), (B), and
(C)of paragraph
(1)shall be shall be increased by an amount equal to— > > > ##### “(A) > > such dollar amount, multiplied by > > > ##### “(B) > > the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, except that section 1(f)(3)(B) shall be applied by substituting ‘2012’ for ‘1992’. > > If any amount after adjustment under the preceding sentence is not a multiple of $50, such amount shall be rounded to the next lowest multiple of $50.” > , and ######
(ii)by striking subsections
(f)and (g). #####
(B)Phaseout of deductions for personal exemptions ######
(i)In general Paragraph
(3)of section 151(d) is amended— ######
(I)by striking “the threshold amount” in subparagraphs
(A)and
(B)and inserting “the applicable amount in effect under section 68(b)”, ######
(II)by striking subparagraph
(C)and redesignating subparagraph
(D)as subparagraph (C), and ######
(III)by striking subparagraphs
(E)and (F). ######
(ii)Conforming amendments Paragraph
(4)of section 151(d) is amended— ######
(I)by striking subparagraph (B), ######
(II)by redesignating clauses
(i)and
(ii)of subparagraph
(A)as subparagraphs
(A)and (B), respectively, and by indenting such subparagraphs (as so redesignated) accordingly, and ######
(III)by striking all that precedes “ in a calendar year after 1989, ” and inserting the following: > > #### “(4) Inflation adjustment > > In the case of any taxable year beginning” > . ####
(3)Effective date **[**[26 U.S.C. 1 note](/us/usc/t26/s1)**]** The amendments made by this subsection shall apply to taxable years beginning after December 31, 2012. ###
(c)Modifications of Estate Tax ####
(1)Maximum estate tax rate equal to 40 percent **[**[26 U.S.C. 2001](/us/usc/t26/s2001)**]** The table contained in subsection
(c)of section 2001, as amended by section 302(a)(2) of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, is amended by striking “Over $500,000” and all that follows and inserting the following:" ``Over $500,000 but not over $750,000$155,800, plus 37 percent of the excess of such amount over $500,000.Over $750,000 but not over $1,000,000$248,300, plus 39 percent of the excess of such amount over $750,000.Over $1,000,000$345,800, plus 40 percent of the excess of such amount over $1,000,000.''." ####
(2)Technical correction Clause
(i)of section 2010(c)(4)(B) is amended by striking “basic exclusion amount” and inserting “applicable exclusion amount”. ####
(3)Effective dates **[**[26 U.S.C. 2001 note](/us/usc/t26/s2001)**]** #####
(A)In general Except as otherwise provided by in this paragraph, the amendments made by this subsection shall apply to estates of decedents dying, generation-skipping transfers, and gifts made, after December 31, 2012. #####
(B)Technical correction The amendment made by paragraph
(2)shall take effect as if included in the amendments made by section 303 of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.
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Sec. 101
PERMANENT EXTENSION AND MODIFICATION OF 2001 TAX RELIEF
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