INCREASE IN EXEMPTION EQUIVALENT OF UNIFIED CREDIT, LIFETIME GIFTS EXEMPTION, AND GST EXEMPTION AMOUNTS.

SEC. 521. INCREASE IN EXEMPTION EQUIVALENT OF UNIFIED CREDIT, LIFETIME GIFTS EXEMPTION, AND GST EXEMPTION AMOUNTS. (a) In General.—Subsection (c) of section 2010 (relating to applicable credit amount) is amended by striking the table and inserting the following new table: “In the case of estates of decedents dying during: The applicable exclusion amount is: 2002 and 2003 $1,000,000 2004 and 2005 $1,500,000 2006, 2007, and 2008 $2,000,000 2009 $3,500,000.”. (b) Lifetime Gift Exemption Increased to $1,000,000.— (1) For periods before estate tax repeal—Paragraph (1) of section 2505(a) (relating to unified credit against gift tax) is amended by inserting “(determined as if the applicable exclusion amount were $1,000,000)” after “calendar year”. (2) For periods after estate tax repeal.—Paragraph (1) of section 2505(a) (relating to unified credit against gift 115 STAT. 72tax), as amended by paragraph (1), is amended to read as follows: “(1) the amount of the tentative tax which would be determined under the rate schedule set forth in section 2502(a)(2) if the amount with respect to which such tentative tax is to be computed were $1,000,000, reduced by.”. (c) GST Exemption.— (1) In general.—Subsection (a) of 2631 (relating to GST exemption) is amended by striking “of $1,000,000” and inserting “amount”. (2) Exemption amount.—Subsection (c) of section 2631 is amended to read as follows: “(c) GST Exemption Amount.—For purposes of subsection (a), the GST exemption amount for any calendar year shall be equal to the applicable exclusion amount under section 2010(c) for such calendar year.”. (d) Repeal of Special Benefit for Family-Owned Business Interests.—Section 2057 (relating to family-owned business interests) is amended by adding at the end the following new subsection: “(j) Termination.—This section shall not apply to the estates of decedents dying after December 31, 2003.”. (e) Effective Dates.— (1) In general.—Except as provided in paragraphs (2) and (3), the amendments made by this section shall apply to estates of decedents dying, and gifts made, after December 31,2001. (2) Subsection (b)(2).—The amendments made by subsection (b)(2) shall apply to gifts made after December 31, 2009. (3) Subsections (c) and (d).—The amendments made by subsections (c) and (d) shall apply to estates of decedents dying, and generation-skipping transfers, after December 31, 2003.