II 

109TH CONGRESS 

1ST SESSION S. 1366 

To amend the Internal Revenue Code of 1986 to allow tax-free distributions 

from individual retirement accounts for charitable purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 30, 2005 

Mr. DORGAN (for himself, Ms. SNOWE, Mr. KERRY, Mr. SMITH, and Mr. 

SCHUMER) 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 allow taxfree distributions from individual retirement accounts 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. SHORT TITLE. 

4 This Act may be cited as the ‘‘Public Good IRA Roll5 over Act’’. 
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1 SEC. 2. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RE2 TIREMENT ACCOUNTS FOR CHARITABLE 

3 PURPOSES. 

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

5 the Internal Revenue Code of 1986 (relating to individual 

6 retirement accounts) is amended by adding at the end the 

7 following new paragraph: 

8 ‘‘(8) DISTRIBUTIONS FOR CHARITABLE PUR9 POSES.— 

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

11 includible in gross income by reason of a quali12 fied charitable distribution. 

13 ‘‘(B) QUALIFIED CHARITABLE DISTRIBU14 TION.—For purposes of this paragraph, the 

15 term ‘qualified charitable distribution’ means 

16 any distribution from an individual retirement 

17 account— 

18 ‘‘(i) which is made directly by the 

19 trustee— 

20 ‘‘(I) to an organization described 

21 in section 170(c), or 

22 ‘‘(II) to a split-interest entity, 

23 and 

24 ‘‘(ii) which is made on or after the 

25 date that the individual for whose benefit 

26 the account is maintained has attained— 
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1 ‘‘(I) in the case of any distribu2 tion described in clause (i)(I), age 

701 3 ⁄2, and 

4 ‘‘(II) in the case of any distribu5 tion described in clause (i)(II), age 

591 6 ⁄2. 

7 A distribution shall be treated as a qualified 

8 charitable distribution only to the extent that 

9 the distribution would be includible in gross in10 come without regard to subparagraph (A) and, 

11 in the case of a distribution to a split-interest 

12 entity, only if no person holds an income inter13 est in the amounts in the split-interest entity 

14 attributable to such distribution other than one 

15 or more of the following: the individual for 

16 whose benefit such account is maintained, the 

17 spouse of such individual, or any organization 

18 described in section 170(c). 

19 ‘‘(C) CONTRIBUTIONS MUST BE OTHER20 WISE DEDUCTIBLE.—For purposes of this para21 graph— 

22 ‘‘(i) DIRECT CONTRIBUTIONS.—A dis23 tribution to an organization described in 

24 section 170(c) shall be treated as a quali25 fied charitable distribution only if a deduc-
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1 tion for the entire distribution would be al2 lowable under section 170 (determined 

3 without regard to subsection (b) thereof 

4 and this paragraph). 

5 ‘‘(ii) SPLIT-INTEREST GIFTS.—A dis6 tribution to a split-interest entity shall be 

7 treated as a qualified charitable distribu8 tion only if a deduction for the entire value 

9 of the interest in the distribution for the 

10 use of an organization described in section 

11 170(c) would be allowable under section 

12 170 (determined without regard to sub13 section (b) thereof and this paragraph). 

14 ‘‘(D) APPLICATION OF SECTION 72.—Not15 withstanding section 72, in determining the ex16 tent to which a distribution is a qualified chari17 table distribution, the entire amount of the dis18 tribution shall be treated as includible in gross 

19 income without regard to subparagraph (A) to 

20 the extent that such amount does not exceed 

21 the aggregate amount which would be so includ22 ible if all amounts were distributed from all in23 dividual retirement accounts otherwise taken 

24 into account in determining the inclusion on 

25 such distribution under section 72. Proper ad-
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1 justments shall be made in applying section 72 

2 to other distributions in such taxable year and 

3 subsequent taxable years. 

4 ‘‘(E) SPECIAL RULES FOR SPLIT-INTEREST

5 ENTITIES.— 

6 ‘‘(i) CHARITABLE REMAINDER

7 TRUSTS.—Notwithstanding section 664(b), 

8 distributions made from a trust described 

9 in subparagraph (G)(i) shall be treated as 

10 ordinary income in the hands of the bene11 ficiary to whom is paid the annuity de12 scribed in section 664(d)(1)(A) or the pay13 ment described in section 664(d)(2)(A). 

14 ‘‘(ii) POOLED INCOME FUNDS.—No 

15 amount shall be includible in the gross in16 come of a pooled income fund (as defined 

17 in subparagraph (G)(ii)) by reason of a 

18 qualified charitable distribution to such 

19 fund, and all distributions from the fund 

20 which are attributable to qualified chari21 table distributions shall be treated as ordi22 nary income to the beneficiary. 

23 ‘‘(iii) CHARITABLE GIFT ANNU24 ITIES.—Qualified charitable distributions 

25 made for a charitable gift annuity shall not 
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1 be treated as an investment in the con2 tract. 

3 ‘‘(F) DENIAL OF DEDUCTION.—Qualified 

4 charitable distributions shall not be taken into 

5 account in determining the deduction under sec6 tion 170. 

7 ‘‘(G) SPLIT-INTEREST ENTITY DEFINED.—

8 For purposes of this paragraph, the term ‘split9 interest entity’ means— 

10 ‘‘(i) a charitable remainder annuity 

11 trust or a charitable remainder unitrust 

12 (as such terms are defined in section 

13 664(d)) which must be funded exclusively 

14 by qualified charitable distributions, 

15 ‘‘(ii) a pooled income fund (as defined 

16 in section 642(c)(5)), but only if the fund 

17 accounts separately for amounts attrib18 utable to qualified charitable distributions, 

19 and 

20 ‘‘(iii) a charitable gift annuity (as de21 fined in section 501(m)(5)).’’. 

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

23 this section shall apply to taxable years beginning after 

24 December 31, 2004.

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