115 STAT. 70 PUBLIC LAW 107-16—JUNE 7, 2001 Subtitle B—Reductions of Estate and Gift Tax Rates SEC. 511. ADDITIONAL REDUCTIONS OF ESTATE AND GIFT TAX RATES. (a) MAXIMUM RATE OF TAX REDUCED TO 50 PERCENT.— The 26 USC 2001. table contained in section 2001(c)(1) is amended by striking the two highest brackets and inserting the following: "Over $2,500,000 $1,025,800, plus 50% of the excess over $2,500,000.". (b) REPEAL OF PHASEOUT OF GRADUATED RATES. — Subsection (c) of section 2001 is amended by striking paragraph (2). (c) ADDITIONAL REDUCTIONS OF MAXIMUM RATE OF TAX. —Subsection (c) of section 2001, as amended by subsection (b), is amended by adding at the end the following new paragraph: " (2) PHASEDOWN OF MAXIMUM RATE OF TAX. — Regulations. "(A) IN GENERAL. —In the case of estates of decedents dying, and gifts made, in calendar years after 2002 and before 2010, the tentative tax under this subsection shall be determined by using a table prescribed by the Secretary (in lieu of using the table contained in paragraph (1)) which is the same as such table; except that— "(i) the maximum rate of tax for any calendar year shall be determined in the table under subparagraph (B), and "(ii) the brackets and the amounts setting forth the tax shall be adjusted to the extent necessary to reflect the adjustments under subparagraph (A). "(B) MAXIMUM RATE.— The maximum "In calendar year: rate is: 2003 49 percent 2004 48 percent 2005 47 percent 2006 46 percent 2007, 2008, and 2009 45 percent.". (d) MAXIMUM GIFT TAX RATE REDUCED TO MAXIMUM INDIVIDUAL RATE AFTER 2009. —Subsection (a) of section 2502 (relating to rate of tax) is amended to read as follows: " (a) COMPUTATION OF TAX.— "(1) IN GENERAL.—The tax imposed by section 2501 for each calendar year shall be an amount equal to the excess of— "(A) a tentative tax, computed under paragraph (2), on the aggregate sum of the taxable gifts for such calendar year and for each of the preceding calendar periods, over "(B) a tentative tax, computed under paragraph (2), on the aggregate sum of the taxable gifts for each of the preceding calendar periods. "(2) RATE SCHEDULE. — "If the amount with respect to The tentative tax is: which the tentative tax to be computed is: Not over $10,000 18% of such amount. Over $10,000 but not over $20,000... $1,800, plus 20% of the excess over $10,000. Over $20,000 but not over $40,000... $3,800, plus 22% of the excess over $20,000.
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