HR1301-119

What This Bill Does

The Death Tax Repeal Act terminates two major transfer taxes. It amends chapter 11 of the Internal Revenue Code so, except for a transition rule involving qualified domestic trusts for surviving spouses of pre-enactment decedents, the estate tax no longer applies to estates of decedents dying on or after enactment. It also amends chapter 13 so the generation-skipping transfer tax no longer applies to generation-skipping transfers on or after enactment. The bill does not merely increase exemptions; it ends the estate and GST taxes prospectively, reducing tax on large estates and multigenerational wealth transfers while reducing federal transfer-tax revenue.

Who Benefits and How

Large estates benefit because the federal estate tax no longer applies to decedents dying after enactment. Family-owned businesses and farms benefit if heirs avoid estate-tax liquidity pressure on closely held assets. Trust and estate planners benefit from a major change in transfer-tax planning. High-net-worth families benefit because generation-skipping transfers can occur without GST tax after enactment.

Who Bears the Burden and How

Federal taxpayers and the Treasury lose estate and generation-skipping transfer tax revenue. Wealth-tax and estate-tax equity advocates bear the burden of repeal of taxes aimed at large wealth transfers. The IRS must administer transition rules and update estate and GST tax forms, guidance, and enforcement plans. State estate-tax systems may face planning shifts if the federal estate tax no longer anchors transfer-tax decisions.

Key Provisions

• Repeals the federal estate tax for decedents dying on or after enactment.
• Repeals the generation-skipping transfer tax for transfers on or after enactment.
• Provides transition treatment for certain qualified domestic trust rules.
• Ends federal transfer-tax liability prospectively rather than only raising exemption amounts.