Small Business and Family Farm Estate and Gift Tax Relief Amendments

Small Business and Family Farm Estate and Gift Tax Relief Amendments - Amends the Internal Revenue Code to provide a credit of $25,000 against the estate tax. Requires such credit to be reduced by the amount of the gift tax credit used by the decedent during his lifetime.

Allows the executor of a qualified estate to elect a credit of $40,000 against the estate tax. Defines a "qualified estate" as one in which 35 percent or more of the value of the gross estate, or 50 percent of the taxable estate of the decedent, is attributable to property held by a closely held business which has been actively managed by the decedent or his immediate family for at least five years prior to the death of the decedent.

Provides that if the immediate family of the decedent does not own and actively manage such qualifying small business for at least five years after the death of the decedent, the benefit of such additional credit shall be recaptured.

Provides that the $40,000 credit shall be reduced by an amount equal to five percent of the amount by which the adjusted gross estate exceeds $300,000. Provides that either credit shall be reduced by an amount equal to 0.83 percent of the amount by which the adjusted gross estate exceeds $2,000,000.

Repeals the estate tax exemption.

Provides a credit against the gift tax of $25,000, or in the case of a qualified closely held business, $40,000.

Provides that the aggregate amount of the estate tax marital deduction may not exceed: (1) $100,000, plus; (2) an amount equal to 50 percent of the amount by which the adjusted gross estate $100,000 and does not exceed $300,000, plus; and (3) an amount equal to 25 percent of the amount by which the adjusted gross estate exceeds $300,000.

Provides that if the value of an interest in a closely held business which is included in determining the gross estate of a decedent exceeds either 35 percent of the value of the gross estate, or 50 percent of the value of the taxable estate, the executor may elect to pay the estate tax in up to 15 (presently ten) equal installments.

Directs the Secretary of the Treasury to conduct a study of the present application of the hardship exception for payment of the estate tax when the estate consists largely of an interest in a closely held business.