II

106TH CONGRESS

1ST SESSION S. 1086

To amend the Internal Revenue Code of 1986 to waive the income inclusion

on a distribution from an individual retirement account to the extent

that the distribution is contributed for charitable purposes.

IN THE SENATE OF THE UNITED STATES

MAY 20, 1999

Mrs. HUTCHISON (for herself, Mr. DURBIN, Mr. HELMS, and Mrs. FEINSTEIN) 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 waive

the income inclusion on a distribution from an individual

retirement account to the extent that the distribution

is contributed for charitable purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL

4 RETIREMENT ACCOUNTS FOR CHARITABLE

5 PURPOSES.

6 (a) IN GENERAL.—Subsection (d) of section 408 of

7 the Internal Revenue Code of 1986 (relating to individual
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1 retirement accounts) is amended by adding at the end the

2 following new paragraph:

3 ‘‘(8) DISTRIBUTIONS FOR CHARITABLE PUR4 POSES.—

5 ‘‘(A) IN GENERAL.—No amount shall be

6 includible in gross income by reason of a quali7 fied charitable distribution from an individual

8 retirement account to an organization described

9 in section 170(c).

10 ‘‘(B) SPECIAL RULES RELATING TO CHARI11 TABLE REMAINDER TRUSTS, POOLED INCOME

12 FUNDS, AND CHARITABLE GIFT ANNUITIES.—

13 ‘‘(i) IN GENERAL.—No amount shall

14 be includible in gross income by reason of

15 a qualified charitable distribution from an

16 individual retirement account—

17 ‘‘(I) to a charitable remainder

18 annuity trust or a charitable remain19 der unitrust (as such terms are de20 fined in section 664(d)),

21 ‘‘(II) to a pooled income fund (as

22 defined in section 642(c)(5)), or

23 ‘‘(III) for the issuance of a chari24 table gift annuity (as defined in sec25 tion 501(m)(5)).
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1 The preceding sentence shall apply only if

2 no person holds an income interest in the

3 amounts in the trust, fund, or annuity at4 tributable to such distribution other than

5 one or more of the following: the individual

6 for whose benefit such account is main7 tained, the spouse of such individual, or

8 any organization described in section

9 170(c).

10 ‘‘(ii) DETERMINATION OF INCLUSION

11 OF AMOUNTS DISTRIBUTED.—In deter12 mining the amount includible in the gross

13 income of any person by reason of a pay14 ment or distribution from a trust referred

15 to in clause (i)(I) or a charitable gift annu16 ity (as so defined), the portion of any

17 qualified charitable distribution to such

18 trust or for such annuity which would (but

19 for this subparagraph) have been includible

20 in gross income—

21 ‘‘(I) shall be treated as income

22 described in section 664(b)(1), and

23 ‘‘(II) shall not be treated as an

24 investment in the contract.
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1 ‘‘(iii) NO INCLUSION FOR DISTRIBU2 TION TO POOLED INCOME FUND.—No

3 amount shall be includible in the gross in4 come of a pooled income fund (as so de5 fined) by reason of a qualified charitable

6 distribution to such fund.

7 ‘‘(C) QUALIFIED CHARITABLE DISTRIBU8 TION.—For purposes of this paragraph, the

9 term ‘qualified charitable distribution’ means

10 any distribution from an individual retirement

11 account—

12 ‘‘(i) which is made on or after the

13 date that the individual for whose benefit

14 the account is maintained has attained age

591 15 ⁄2, and

16 ‘‘(ii) which is made directly from the

17 account to—

18 ‘‘(I) an organization described in

19 section 170(c), or

20 ‘‘(II) a trust, fund, or annuity re21 ferred to in subparagraph (B).

22 ‘‘(D) DENIAL OF DEDUCTION.—The

23 amount allowable as a deduction under section

24 170 to the taxpayer for the taxable year shall

25 be reduced (but not below zero) by the sum of
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1 the amounts of the qualified charitable distribu2 tions during such year which would be includ3 ible in the gross income of the taxpayer for

4 such year but for this paragraph.’’

5 (b) EFFECTIVE DATE.—The amendment made by

6 subsection (a) shall apply to taxable years beginning after

7 the date of the enactment of this Act.

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