PUBLIC LAW 100-203—DEC. 22, 1987
101 STAT. 1330-431
respect to which the tentative tax is to be computed) as exceeds $10,000,000 but does not exceed $21,040,000 ($18,340,000 in the case of decedents dying, and gifts made, after 1992)." (2) TECHNICAL AMENDMENTS.—
(A) Subsection (b) of section 2001 is amended— (i) by striking out "in accordance with the rate schedule set forth in subsection (c)" in paragraph (1) and inserting in lieu thereof "under subsection (c)", and (ii) by striking out "the rate schedule set forth in subsection (c) (as in effect at the decedent's death)" in paragraph (2) and inserting in lieu thereof "the provisions of subsection (c) (as in effect at the decedent's ,..,, death)". (B) Subsection (a) of section 2502 is amended— (i) by striking out "in accordance with the rate schedule set forth in section 2001(c)" in paragraph (1) and inserting in lieu thereof "under section 2001(c)", and . (ii) by striking out "in accordance with such rate schedule" in paragraph (2) and inserting in lieu thereof "under such section". (c) EFFECTIVE DATE.—The amendments made by this section shall 26 USC 2001 apply in the Case of decedents dying, and gifts made, after note. December 31, 1987. SEC. 10402. INCLUSION RELATED TO VALUATION FREEZES.
(a) IN GENERAL.—Section 2036 (relating to transfers with retained life estate) is amended by redesignating subsection (c) as subsection (d) and by inserting after subsection (b) the following new subsection: "(c) INCLUSION RELATED TO VALUATION FREEZES.—
"(1) IN GENERAL.—For purposes of subsection (a), if— "(A) any person holds a substantial interest in an enterprise, and "(B) such person in effect transfers after December 17, 1987, property having a disproportionately large share of the potential appreciation in such person's interest in the s enterprise while retaining a disproportionately large share in the income of, or rights in, the enterprise, then the retention of the retained interest shall be considered to be a retention of the enjoyment of the transferred property. "(2) SPECIAL RULE FOR SALES TO FAMILY MEMBERS.—The exception contained in subsection (a) for a bona fide sale shall not ', apply to a transfer described in paragraph (1) if such transfer is to a member of the transferor's family.
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"(3) DEFINITIONS.—For purposes of this subsection— "(A) SUBSTANTIAL INTEREST.—A person holds a substantial interest in an enterprise if such person owns (directly or indirectly) 10 percent or more of the voting power or income stream, or both, in such enterprise. For purposes of the preceding sentence, an individual shall be treated as owning any interest in an enterprise which is owned (directly or indirectly) by any member of such individual's family. "(B) FAMILY.—The term 'family' means, with respect to any individual, such individual's spouse, any lineal descendant of such individual or of such individual's spouse, any parent or grandparent of such individual, and any spouse of
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