S.Amdt. 2923

1. Adds SEC. __. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT ACCOUNTS FOR CHARITABLE PURPOSES on page 179, line 25

   Adds a sectionPrinted page

   Inserted: SEC. __. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT ACCOUNTS FOR CHARITABLE PURPOSES.

   Inserted: (a) In General.--Subsection (d) of section 408 (relating to individual retirement accounts) is amended by adding at the end the following new paragraph:

   Inserted: "(8) Distributions for charitable purposes.--

   Inserted: "(A) In general.--No amount shall be includible in gross income by reason of a qualified charitable distribution.

   Inserted: "(B) Qualified charitable distribution.--For purposes of this paragraph, the term 'qualified charitable distribution' means any distribution from an individual retirement account--

   Inserted: "(i) which is made directly by the trustee--

   Inserted: "(I) to an organization described in section 170(c), or

   Inserted: "(II) to a split-interest entity, and

   Inserted: "(ii) which is made on or after--

   Inserted: "(I) in the case of any distribution described in clause (i)(I), the date that the individual for whose benefit the account is maintained has attained age 70\1/2\, and

   Inserted: "(II) in the case of any distribution described in clause (i)(II), the the date that such individual has attained age 59\1/2\.

   Inserted: A distribution shall be treated as a qualified charitable distribution only to the extent that the distribution would be includible in gross income without regard to subparagraph (A) and, in the case of a distribution to a split-interest entity, only if no person holds an income interest in the amounts in the split-interest entity attributable to such distribution other than one or more of the following: the individual for whose benefit such account is maintained, the spouse of such individual, or any organization described in section 170(c).

   Show 40 more inserted paragraphsShow less

   Inserted: "(C) Contributions must be otherwise deductible.--For purposes of this paragraph--

   Inserted: "(i) Direct contributions.--A distribution to an organization described in section 170(c) shall be treated as a qualified charitable distribution only if a deduction for the entire distribution would be allowable under section 170 (determined without regard to subsection (b) thereof and this paragraph).

   Inserted: "(ii) Split-interest gifts.--A distribution to a split-interest entity shall be treated as a qualified charitable distribution only if a deduction for the entire value of the interest in the distribution for the use of an organization described in section 170(c) would be allowable under section 170 (determined without regard to subsection (b) thereof and this paragraph).

   Inserted: "(D) Application of section 72.--Notwithstanding section 72, in determining the extent to which a distribution is a qualified charitable distribution, the entire amount of the distribution shall be treated as includible in gross income without regard to subparagraph (A) to the extent that such amount does not exceed the aggregate amount which would have been so includible if all amounts were distributed from all individual retirement accounts treated as 1 contract under paragraph (2)(A) for purposes of determining the inclusion on such distribution under section 72. Proper adjustments shall be made in applying section 72 to other distributions in such taxable year and subsequent taxable years.

   Inserted: "(E) Special rules for split-interest entities.--

   Inserted: "(i) Charitable remainder trusts.--Notwithstanding section 664(b), distributions made from a trust described in subparagraph (G)(i) shall be treated as ordinary income in the hands of the beneficiary to whom is paid the annuity described in section 664(d)(1)(A) or the payment described in section 664(d)(2)(A).

   Inserted: "(ii) Pooled income funds.--No amount shall be includible in the gross income of a pooled income fund (as defined in subparagraph (G)(ii)) by reason of a qualified charitable distribution to such fund, and all distributions from the fund which are attributable to qualified charitable distributions shall be treated as ordinary income to the beneficiary.

   Inserted: "(iii) Charitable gift annuities.--Qualified charitable distributions made for a charitable gift annuity shall not be treated as an investment in the contract.

   Inserted: "(F) Denial of deduction.--Qualified charitable distributions shall not be taken into account in determining the deduction under section 170.

   Inserted: "(G) Split-interest entity defined.--For purposes of this paragraph, the term 'split-interest entity' means--

   Inserted: "(i) a charitable remainder annuity trust or a charitable remainder unitrust (as such terms are defined in section 664(d)) which must be funded exclusively by qualified charitable distributions,

   Inserted: "(ii) a pooled income fund (as defined in section 642(c)(5)), but only if the fund accounts separately for amounts attributable to qualified charitable distributions, and

   Inserted: "(iii) a charitable gift annuity (as defined in section 501(m)(5)).".

   Inserted: (b) Modifications Relating to Information Returns by Certain Trusts.--

   Inserted: (1) Returns.--Section 6034 (relating to returns by trusts described in section 4947(a)(2) or claiming charitable deductions under section 642(c)) is amended to read as follows:

   Inserted: "SEC. 6034. RETURNS BY TRUSTS DESCRIBED IN SECTION 4947(A)(2) OR CLAIMING CHARITABLE DEDUCTIONS UNDER SECTION 642(C).

   Inserted: "(a) Trusts Described in Section 4947(a)(2).--Every trust described in section 4947(a)(2) shall furnish such information with respect to the taxable year as the Secretary may by forms or regulations require.

   Inserted: "(b) Trusts Claiming a Charitable Deduction Under Section 642(c).--

   Inserted: "(1) In general.--Every trust not required to file a return under subsection (a) but claiming a deduction under section 642(c) for the taxable year shall furnish such information with respect to such taxable year as the Secretary may by forms or regulations prescribe, including--

   Inserted: "(A) the amount of the deduction taken under section 642(c) within such year,

   Inserted: "(B) the amount paid out within such year which represents amounts for which deductions under section 642(c) have been taken in prior years,

   Inserted: "(C) the amount for which such deductions have been taken in prior years but which has not been paid out at the beginning of such year,

   Inserted: "(D) the amount paid out of principal in the current and prior years for the purposes described in section 642(c),

   Inserted: "(E) the total income of the trust within such year and the expenses attributable thereto, and

   Inserted: "(F) a balance sheet showing the assets, liabilities, and net worth of the trust as of the beginning of such year.

   Inserted: "(2) Exceptions.--Paragraph (1) shall not apply to a trust for any taxable year if--

   Inserted: "(A) all the net income for such year, determined under the applicable principles of the law of trusts, is required to be distributed currently to the beneficiaries, or

   Inserted: "(B) the trust is described in section 4947(a)(1).".

   Inserted: (2) Increase in penalty relating to filing of information return by split-interest trusts.--Paragraph (2) of section 6652(c) (relating to returns by exempt organizations and by certain trusts) is amended by adding at the end the following new subparagraph:

   Inserted: "(C) Split-interest trusts.--In the case of a trust which is required to file a return under section 6034(a), subparagraphs (A) and (B) of this paragraph shall not apply and paragraph (1) shall apply in the same manner as if such return were required under section 6033, except that--

   Inserted: "(i) the 5 percent limitation in the second sentence of paragraph (1)(A) shall not apply,

   Inserted: "(ii) in the case of any trust with gross income in excess of $250,000, the first sentence of paragraph (1)(A) shall be applied by substituting '$100' for '$20', and the second sentence thereof shall be applied by substituting '$50,000' for '$10,000', and

   Inserted: "(iii) the third sentence of paragraph (1)(A) shall be disregarded.

   Inserted: In addition to any penalty imposed on the trust pursuant to this subparagraph, if the person required to file such return knowingly fails to file the return, such penalty shall also be imposed on such person who shall be personally liable for such penalty.".

   Inserted: (3) Confidentiality of noncharitable beneficiaries.--Subsection (b) of section 6104 (relating to inspection of annual information returns) is amended by adding at the end the following new sentence: "In the case of a trust which is required to file a return under section 6034(a), this subsection shall not apply to information regarding beneficiaries which are not organizations described in section 170(c).".

   Inserted: (c) Effective Dates.--

   Inserted: (1) Subsection (a).--The amendment made by subsection (a) shall apply to distributions--

   Inserted: (A) described in section 408(d)(8)(B)(i)(I) of the Internal Revenue Code of 1986, as added by this section, made after the date of the enactment of this Act, and

   Inserted: (B) described in section 408(d)(8)(B)(i)(II) of such Code, as so added, made after December 31, 2003.

   Inserted: (2) Subsection (b).--The amendments made by subsection (b) shall apply to returns for taxable years beginning after December 31, 2003.

   Original wording

   On page 179, after line 25, add the following:

Read automatically from the Congressional Record. Check the original before relying on it.

As printed