PUBLIC LAW 109–280—AUG. 17, 2006
120 STAT. 1083
‘‘(I) the date that is 10 years after the date of the initial fractional contribution, or ‘‘(II) the date of the death of the donor, and ‘‘(ii) in any case in which the donee has not, during the period beginning on the date of the initial fractional contribution and ending on the date described in clause (i)— ‘‘(I) had substantial physical possession of the property, and ‘‘(II) used the property in a use which is related to a purpose or function constituting the basis for the organizations’ exemption under section 501. ‘‘(B) ADDITION TO TAX.—The tax imposed under this chapter for any taxable year for which there is a recapture under subparagraph (A) shall be increased by 10 percent of the amount so recaptured. ‘‘(4) DEFINITIONS.—For purposes of this subsection— ‘‘(A) ADDITIONAL CONTRIBUTION.—The term ‘additional contribution’ means any gift for which a deduction is allowed under subsection (a) or (b) of any interest in a property with respect to which the donor has previously made an initial fractional contribution. ‘‘(B) INITIAL FRACTIONAL CONTRIBUTION.—The term ‘initial fractional contribution’ means, with respect to any donor, the first gift of an undivided portion of the donor’s entire interest in any tangible personal property for which a deduction is allowed under subsection (a) or (b).’’. (d) EFFECTIVE DATE.—The amendments made by this section shall apply to contributions, bequests, and gifts made after the date of the enactment of this Act.
26 USC 170 note.
SEC. 1219. PROVISIONS RELATING TO SUBSTANTIAL AND GROSS OVERSTATEMENTS OF VALUATIONS.
(a) MODIFICATION OF THRESHOLDS FOR SUBSTANTIAL AND GROSS VALUATION MISSTATEMENTS.— (1) SUBSTANTIAL VALUATION MISSTATEMENT.— (A) INCOME TAXES.—Subparagraph (A) of section 6662(e)(1) (relating to substantial valuation misstatement under chapter 1) is amended by striking ‘‘200 percent’’ and inserting ‘‘150 percent’’. (B) ESTATE AND GIFT TAXES.—Paragraph (1) of section 6662(g) is amended by striking ‘‘50 percent’’ and inserting ‘‘65 percent’’. (2) GROSS VALUATION MISSTATEMENT.— (A) INCOME TAXES.—Clauses (i) and (ii) of section 6662(h)(2)(A) (relating to increase in penalty in case of gross valuation misstatements) are amended to read as follows: ‘‘(i) in paragraph (1)(A), ‘200 percent’ for ‘150 percent’, ‘‘(ii) in paragraph (1)(B)(i)— ‘‘(I) ‘400 percent’ for ‘200 percent’, and ‘‘(II) ‘25 percent’ for ‘50 percent’, and’’. (B) ESTATE AND GIFT TAXES.—Subparagraph (C) of section 6662(h)(2) is amended by striking ‘‘ ‘25 percent’ for ‘50 percent’ ’’ and inserting ‘‘ ‘40 percent’ for ‘65 percent’ ’’.
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