PUBLIC LAW 105-206-^ULY 22, 1998 112 STAT. 807 (1) Subsection (c) of section 2631 of the 1986 Code is amended to read as follows: "(c) INFLATION ADJUSTMENT.— "(1) IN GENERAL.—In the case of any calendar year after 1998, the $1,000,000 amount contained in subsection (a) shall be increased by an amount equal to— "(A) $ 1,000,000, multiplied by "(B) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting 'calendar year 1997' for 'calendar year 1992' in subparagraph (B) thereof. If any amount as adjusted under the preceding sentence is not a multiple of $10,000, such amount shall be rounded to the next lowest multiple of $10,000. "(2) ALLOCATION OF INCREASE. — Any increase under para- Applicability, graph (1) for any calendar year shall apply only to generationskipping transfers made during or after such calendar year; except that no such increase for calendar years after the calendar year in which the transferor dies shall apply to transfers by such transferor.". (2) Subsection (f) of section 501 of the 1997 Act is amended 26 USC 2001 by inserting "(other than the amendment made by subsection ^°'^- (d))" after "this section". (b) AMENDMENTS RELATED TO SECTION 502 OF 1997 ACT. — (1)(A) Section 2033A of the 1986 Code is hereby moved to the end of part IV of subchapter A of chapter 11 of the 1986 Code and redesignated as section 2057. (B) So much of such section 2057 (as so redesignated) as precedes subsection (b) thereof is amended to read as follows: "SEC. 2057. FAMILY-OWNED BUSINESS INTERESTS. "(a) GENERAL RULE. — "(1) ALLOWANCE OF DEDUCTION. —For purposes of the tax imposed by section 2001, in the case of an estate of a decedent to which this section applies, the value of the taxable estate shall be determined by deducting from the value of the gross estate the adjusted value of the qualified family-owned business interests of the decedent which are described in subsection (b)(2). "(2) MAXIMUM DEDUCTION.— The deduction allowed by this section shall not exceed $675,000. " (3) COORDINATION WITH UNIFIED CREDIT.— "(A) IN GENERAL. —Except as provided in subparagraph (B), if this section applies to an estate, the applicable exclusion amount under section 2010 shall be $625,000. " (B) INCREASE IN UNIFIED CREDIT IF DEDUCTION IS LESS THAN $675,000.— If the deduction allowed by this section is less than $675,000, the amount of the applicable exclusion amount under section 2010 shall be increased (but not above the amount which would apply to the estate without regard to this section) by the excess of $675,000 over the amount of the deduction allowed.". (C) Subparagraph (A) of section 2057(b)(2) of the 1986 Code (as so redesignated) is amended by striking "(without regard to this section)". 68-194O-98 -27:QL3Part1
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