12 2 STA T . 1 64 4 PUBLIC LA W 11 0– 24 5—J U NE 1 7, 200 8‘ ‘ (5)LONG-TERM RE SID ENT .—Thet e rm ‘ long -term re sid ent ’ h a s the meaning gi v entos uc h term by section 87 7(e)( 2 ). ‘‘( 6 ) EA R LY DISTRI BU TION TA X .—The term ‘early distribution ta x ’ means any increase in tax im p osed under section 72(t) , 22 0 (e)( 4 ), 22 3 ( f )(4), 40 9A (a)( 1 )( B ), 529(c)(6), or 530(d)(4). ‘‘(h) O T H ER R ULES.— ‘‘(1) TERMINATION O F DEFERRALS, ET C .— I n the case of any covered expatriate, not w ithstanding any other provision of this title— ‘‘(A) any time period for ac q uiring property which would result in the reduction in the amount of gain recog- ni z ed with respect to property disposed of by the taxpayer shall terminate on the day before the expatriation date, and ‘‘(B) any extension of time for payment of tax shall cease to apply on the day before the expatriation date and the unpaid portion of such tax shall be due and payable at the time and in the manner prescribed by the S ecretary. ‘‘(2) STE P -UP IN BASIS.—Solely for purposes of determining any tax imposed by reason of subsection (a), property which was held by an individual on the date the individual first became a resident of the U nited States (within the meaning of section 7701(b)) shall be treated as having a basis on such date of not less than the fair mar k et value of such property on such date. The preceding sentence shall not apply if the individual elects not to have such sentence apply. Such an election, once made, shall be irrevocable. ‘‘(3) C OORDINATION W ITH SECTION 684 .—If the expatriation of any individual would result in the recognition of gain under section 684, this section shall be applied after the application of section 684. ‘‘(i) REGULATIONS.—The Secretary shall prescribe such regula- tions as may be necessary or appropriate to carry out the purposes of this section.’’. (b) TAX ON G IFTS AND BE Q UESTS RECEI V ED BY UNITED STATES CITI Z ENS AND RESIDENTS F ROM EXPATRIATES.— (1) IN GENERAL.—Subtitle B (relating to estate and gift taxes) is amended by inserting after chapter 14 the following new chapter
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‘ CHAPTER15—GIF T S A NDB E QU ESTS FR OM E X PATRIATES ‘ ‘ Sec.2801 . Imposit io n o f t ax . ‘ ‘ SEC.2801 . IMPO SI T IO N O F T AX . ‘‘(a) IN GENERAL.—If, during any calendar year, any United States citizen or resident receives any covered gift or bequest, there is hereby imposed a tax equal to the product of— ‘‘(1) the highest rate of tax specified in the table contained in section 2001(c) as in effect on the date of such receipt (or, if greater, the highest rate of tax specified in the table applicable under section 2502(a) as in effect on the date), and ‘‘(2) the value of such covered gift or bequest. ‘‘(b) TAX TO BE P AID BY RECIPIENT.—The tax imposed by sub- section (a) on any covered gift or bequest shall be paid by the person receiving such gift or bequest. Ap p licab ili ty.
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