[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 243 Introduced in Senate (IS)]
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117th CONGRESS
1st Session
S. 243
To amend the Internal Revenue Code of 1986 to expand tax-free
distributions from individual retirement accounts to include rollovers
for charitable life-income plans for charitable purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 4, 2021
Mr. Cramer (for himself, Ms. Stabenow, Mr. Daines, Ms. Rosen, and Mr.
Cornyn) introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to expand tax-free
distributions from individual retirement accounts to include rollovers
for charitable life-income plans for charitable purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Legacy IRA Act''.
SEC. 2. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT ACCOUNTS FOR
CHARITABLE PURPOSES.
(a) In General.--Paragraph (8) of section 408(d) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(8) Distributions for charitable purposes.--
``(A) In general.--No amount shall be includible in
gross income by reason of a qualified charitable
distribution.
``(B) Limitations.--
``(i) In general.--The aggregate amount
excluded from gross income under subparagraph
(A) with respect to all types of qualified
charitable distributions for a taxable year
shall not exceed $400,000.
``(ii) Limitation on outright
contributions.--The aggregate amount excluded
from gross income under subparagraph (A) for a
taxable year with respect to distributions
described in subparagraph (C)(i)(I) shall not
exceed $130,000.
``(C) Qualified charitable distribution.--For
purposes of this paragraph, the term `qualified
charitable distribution' means any distribution from an
individual retirement account--
``(i) which is made directly by the
trustee--
``(I) to a specified charitable
organization as an outright
contribution, or
``(II) to a split-interest entity,
and
``(ii) which is made on or after the date
on which the individual for whose benefit the
account is maintained has attained--
``(I) in the case of any
distribution described in clause
(i)(I), age 70\1/2\, and
``(II) in the case of any
distribution described in clause
(i)(II), age 65.
``(D) Special rules relating to distributions.--For
purposes of this paragraph--
``(i) Distribution must be otherwise
includible.--A distribution from an individual
retirement account 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).
``(ii) Limitation on income interests.--A
distribution from an individual retirement
account to a split-interest entity shall be
treated as a qualified charitable distribution
only if--
``(I) no person holds an income
interest in the split-interest entity
other than the individual for whose
benefit such account is maintained, the
spouse of such individual, or both, and
``(II) the income interest in the
split-interest entity is nonassignable.
``(iii) Contributions must be otherwise
deductible.--A distribution from an individual
retirement account to a specified charitable
organization shall be treated as a qualified
charitable distribution only if--
``(I) in the case of a distribution
to a charitable remainder annuity trust
or a charitable remainder unitrust, a
deduction for the entire value of the
remainder interest in the distribution
for the benefit of a specified
charitable organization would be
allowable under section 170 (determined
without regard to subsection (b)
thereof and this paragraph), and
``(II) in the case of a charitable
gift annuity, a deduction in an amount
equal to the amount of the distribution
reduced by the value of the annuity
described in section 501(m)(5)(B) would
be allowable under section 170
(determined without regard to
subsection (b) thereof and this
paragraph).
``(E) Specified charitable organization.--For
purposes of this paragraph, the term `specified
charitable organization' means an organization
described in section 170(b)(1)(A) (other than any
organization described in section 509(a)(3) or any fund
or account described in section 4966(d)(2)).
``(F) Split-interest entity.--For purposes of this
paragraph, the term `split-interest entity' means--
``(i) a charitable remainder annuity trust
(as defined in section 664(d)(1)), but only if
such trust is funded exclusively by qualified
charitable distributions,
``(ii) a charitable remainder unitrust (as
defined in section 664(d)(2)), but only if such
unitrust is funded exclusively by qualified
charitable distributions, or
``(iii) a charitable gift annuity (as
defined in section 501(m)(5)), but only if such
annuity is funded exclusively by qualified
charitable distributions and commences fixed
payments not later than 1 year from the date of
funding.
``(G) Special rules.--
``(i) Charitable remainder trusts.--
Notwithstanding section 664(b), distributions
made from a trust described in clause (i) or
(ii) of subparagraph (F) shall be treated as
ordinary income in the hands of the beneficiary
to whom the annuity described in section
664(d)(1)(A) or the payment described in
section 664(d)(2)(A) is paid.
``(ii) Charitable gift annuities.--
Qualified charitable distributions made to fund
a charitable gift annuity shall not be treated
as an investment in the contract for purposes
of section 72(c).
``(iii) 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 to the extent that such amount
does not exceed the aggregate amount which
would have been so includible if all amounts in
all individual retirement plans of the
individual were distributed during the taxable
year and all such plans were treated as 1
contract for purposes of determining under
section 72 the aggregate amount which would
have been so includible. Proper adjustments
shall be made in applying section 72 to other
distributions in such taxable year and
subsequent taxable years.
``(iv) Determining deduction under section
170.--Qualified charitable distributions shall
not be taken into account in determining the
deduction under section 170.
``(v) Required minimum distributions.--The
entire amount of a qualified charitable
distribution shall be taken into account for
purposes of section 401(a)(9).''.
(b) Effective Date.--The amendment made by this section shall apply
to distributions made in taxable years ending after the date of the
enactment of this Act.
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