H.R. 2491 – Reading Mode

110th CONGRESS

1st Session

H. R. 2491

IN THE HOUSE OF REPRESENTATIVES

May 24, 2007

Mr. Blumenauer (for himself and Mr. Ramstad) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to treat charitable remainder pet trusts in a manner similar to charitable remainder annuity trusts.

Treatment of charitable remainder pet trusts in manner similar to charitable remainder annuity trusts

(a)

In general

Subsection (a) of section 664 of the Internal Revenue Code of 1986 (relating to general rule) is amended—

(1)

by striking annuity trust and and inserting annuity trust,, and

(2)

by inserting , and a charitable remainder pet trust before the period at the end.

(b)

Income tax treatment

Subsections (a) and (c) of section 664 of such Code (relating to exemption from income taxes) are both amended—

(1)

by striking annuity trust and and inserting annuity trust,, and

(2)

by inserting , and a charitable remainder pet trust after unitrust.

(c)

Charitable remainder pet trust defined

Subsection (d) of section 664 of such Code (relating to definitions) is amended by adding at the end the following new paragraphs:

(5)

Charitable remainder pet trust

For purposes of this section—

(A)

In general

A charitable remainder pet trust is a trust—

(i)

from which a sum certain (which is not less than 5 percent nor more than 50 percent of the initial net fair market value for all property placed in trust) is to be paid, not less often than annually, to a designated person or organization, or a successor designated person or organization, for the exclusive benefit (but allowing for payment of any income tax resulting from the payment) of one or more specified pets for a term of years (not in excess of 20 years), such payments to terminate at the earlier of the expiration of the term of years or the death of the last surviving specified pet,

(ii)

from which no amount other than the payments described in clause (i) and the taxes imposed pursuant to subsection (c) may be paid to or for the use of any person other than an organization described in section 170(c),

(iii)

following the termination of the payments described in clause (i), the remainder interest in the trust is to be transferred to, or for the use of, an organization described in section 170(c), and

(iv)

the value (determined under section 7520) of such remainder interest is at least 10 percent of the initial fair market value of all property placed in the trust.

(B)

Value of remainder interest

For purposes of determining the value of the remainder interest of a charitable remainder pet trust, the pets’ life expectancy shall be disregarded.

(C)

Pet

A pet is any domesticated companion animal (including a domesticated companion cat, dog, rabbit, guinea pig, hamster, gerbil, ferret, mouse, rat, bird, fish, reptile, or horse) which is living, and owned or cared for by the taxpayer establishing the trust, at the time of the creation of the trust.

(d)

Conforming amendments

(1)

Sections 170(f)(2)(A), 2055(e)(2)(A), and 2522(c)(2)(A) of such Code are each amended by striking charitable remainder annuity trust or a charitable remainder unitrust and inserting charitable remainder annuity trust, charitable remainder unitrust, or charitable remainder pet trust.

(2)

Sections 664(e) and 1361(e)(1)(B)(iii) of such Code are both amended by striking charitable remainder annuity trust or charitable remainder unitrust and inserting charitable remainder annuity trust, charitable remainder unitrust, or charitable remainder pet trust.

(3)

Paragraphs (1) and (3) of section 664(f) of such Code are both amended by striking paragraph (1)(A) or (2)(A) and inserting paragraph (1)(A), (2)(A), or (5)(A)(i).

(4)

Section 2055(e)(3)(F) of such Code is amended by inserting or pet (as defined in section 664(d)(5)(C)) after by reason of the death of any individual.

(5)

Section 2652(c)(1)(C) of such Code is amended—

(A)

in clause (i) by inserting within the meaning of section 664 before the comma at the end, and

(B)

by striking or at the end of clause (ii), by redesignating clause (iii) as clause (iv), and by inserting after clause (ii) the following new clause:

(iii)

a charitable remainder pet trust within the meaning of section 664, or

(e)

Effective date

The amendments made by this section shall apply to charitable remainder pet trusts created after the date of the enactment of this Act.