II 

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. 

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 ‘‘Legacy IRA Act’’. 


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1 SEC. 2. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RE2 TIREMENT ACCOUNTS FOR CHARITABLE 

3 PURPOSES. 

4 (a) IN GENERAL.—Paragraph (8) of section 408(d) 

5 of the Internal Revenue Code of 1986 is amended to read 

6 as follows: 

7 ‘‘(8) DISTRIBUTIONS FOR CHARITABLE PUR8 POSES.— 

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

10 includible in gross income by reason of a quali11 fied charitable distribution. 

12 ‘‘(B) LIMITATIONS.— 

13 ‘‘(i) IN GENERAL.—The aggregate 

14 amount excluded from gross income under 

15 subparagraph (A) with respect to all types 

16 of qualified charitable distributions for a 

17 taxable year shall not exceed $400,000. 

18 ‘‘(ii) LIMITATION ON OUTRIGHT CON19 TRIBUTIONS.—The aggregate amount ex20 cluded from gross income under subpara21 graph (A) for a taxable year with respect 

22 to distributions described in subparagraph 

23 (C)(i)(I) shall not exceed $130,000. 

24 ‘‘(C) QUALIFIED CHARITABLE DISTRIBU25 TION.—For purposes of this paragraph, the 

26 term ‘qualified charitable distribution’ means 


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1 any distribution from an individual retirement 

2 account— 

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

4 trustee— 

5 ‘‘(I) to a specified charitable or6 ganization as an outright contribu7 tion, or 

8 ‘‘(II) to a split-interest entity, 

9 and 

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

11 date on which the individual for whose 

12 benefit the account is maintained has at13 tained— 

14 ‘‘(I) in the case of any distribu15 tion described in clause (i)(I), age 

701 16 ⁄2, and 

17 ‘‘(II) in the case of any distribu18 tion described in clause (i)(II), age 

19 65. 

20 ‘‘(D) SPECIAL RULES RELATING TO DIS21 TRIBUTIONS.—For purposes of this para22 graph— 

23 ‘‘(i) DISTRIBUTION MUST BE OTHER24 WISE INCLUDIBLE.—A distribution from 

25 an individual retirement account shall be 


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1 treated as a qualified charitable distribu2 tion only to the extent that the distribution 

3 would be includible in gross income with4 out regard to subparagraph (A). 

5 ‘‘(ii) LIMITATION ON INCOME INTER6 ESTS.—A distribution from an individual 

7 retirement account to a split-interest entity 

8 shall be treated as a qualified charitable 

9 distribution only if— 

10 ‘‘(I) no person holds an income 

11 interest in the split-interest entity 

12 other than the individual for whose 

13 benefit such account is maintained, 

14 the spouse of such individual, or both, 

15 and 

16 ‘‘(II) the income interest in the 

17 split-interest entity is nonassignable. 

18 ‘‘(iii) CONTRIBUTIONS MUST BE OTH19 ERWISE DEDUCTIBLE.—A distribution 

20 from an individual retirement account to a 

21 specified charitable organization shall be 

22 treated as a qualified charitable distribu23 tion only if— 

24 ‘‘(I) in the case of a distribution 

25 to a charitable remainder annuity 


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1 trust or a charitable remainder 

2 unitrust, a deduction for the entire 

3 value of the remainder interest in the 

4 distribution for the benefit of a speci5 fied charitable organization would be 

6 allowable under section 170 (deter7 mined without regard to subsection 

8 (b) thereof and this paragraph), and 

9 ‘‘(II) in the case of a charitable 

10 gift annuity, a deduction in an 

11 amount equal to the amount of the 

12 distribution reduced by the value of 

13 the annuity described in section 

14 501(m)(5)(B) would be allowable 

15 under section 170 (determined with16 out regard to subsection (b) thereof 

17 and this paragraph). 

18 ‘‘(E) SPECIFIED CHARITABLE ORGANIZA19 TION.—For purposes of this paragraph, the 

20 term ‘specified charitable organization’ means 

21 an organization described in section 

22 170(b)(1)(A) (other than any organization de23 scribed in section 509(a)(3) or any fund or ac24 count described in section 4966(d)(2)). 


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1 ‘‘(F) SPLIT-INTEREST ENTITY.—For pur2 poses of this paragraph, the term ‘split-interest 

3 entity’ means— 

4 ‘‘(i) a charitable remainder annuity 

5 trust (as defined in section 664(d)(1)), but 

6 only if such trust is funded exclusively by 

7 qualified charitable distributions, 

8 ‘‘(ii) a charitable remainder unitrust 

9 (as defined in section 664(d)(2)), but only 

10 if such unitrust is funded exclusively by 

11 qualified charitable distributions, or 

12 ‘‘(iii) a charitable gift annuity (as de13 fined in section 501(m)(5)), but only if 

14 such annuity is funded exclusively by quali15 fied charitable distributions and com16 mences fixed payments not later than 1 

17 year from the date of funding. 

18 ‘‘(G) SPECIAL RULES.— 

19 ‘‘(i) CHARITABLE REMAINDER

20 TRUSTS.—Notwithstanding section 664(b), 

21 distributions made from a trust described 

22 in clause (i) or (ii) of subparagraph (F) 

23 shall be treated as ordinary income in the 

24 hands of the beneficiary to whom the an25 nuity described in section 664(d)(1)(A) or 


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1 the payment described in section 

2 664(d)(2)(A) is paid. 

3 ‘‘(ii) CHARITABLE GIFT ANNUITIES.— 

4 Qualified charitable distributions made to 

5 fund a charitable gift annuity shall not be 

6 treated as an investment in the contract 

7 for purposes of section 72(c). 

8 ‘‘(iii) APPLICATION OF SECTION 72.— 

9 Notwithstanding section 72, in determining 

10 the extent to which a distribution is a 

11 qualified charitable distribution, the entire 

12 amount of the distribution shall be treated 

13 as includible in gross income to the extent 

14 that such amount does not exceed the ag15 gregate amount which would have been so 

16 includible if all amounts in all individual 

17 retirement plans of the individual were dis18 tributed during the taxable year and all 

19 such plans were treated as 1 contract for 

20 purposes of determining under section 72 

21 the aggregate amount which would have 

22 been so includible. Proper adjustments 

23 shall be made in applying section 72 to 

24 other distributions in such taxable year 

25 and subsequent taxable years. 


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1 ‘‘(iv) DETERMINING DEDUCTION

2 UNDER SECTION 170.—Qualified charitable 

3 distributions shall not be taken into ac4 count in determining the deduction under 

5 section 170. 

6 ‘‘(v) REQUIRED MINIMUM DISTRIBU7 TIONS.—The entire amount of a qualified 

8 charitable distribution shall be taken into 

9 account for purposes of section 

10 401(a)(9).’’. 

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

12 this section shall apply to distributions made in taxable 

13 years ending after the date of the enactment of this Act. 

Æ 


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