II 

116TH CONGRESS 

1ST SESSION S. 1257 

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 

APRIL 30, 2019 

Mr. CRAMER (for himself and Ms. STABENOW) 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 quali16 fied charitable distributions for a taxable 

17 year shall not exceed $400,000. 

18 ‘‘(ii) SPLIT-INTEREST ENTITIES.— 

19 The aggregate amount excluded from gross 

20 income under subparagraph (A) for a tax21 able year with respect to distributions de22 scribed in subparagraph (C)(i)(I) shall not 

23 exceed $100,000. 

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, or 

7 ‘‘(II) to a split-interest entity, 

8 and 

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

10 date on which the individual for whose 

11 benefit the account is maintained has at12 tained— 

13 ‘‘(I) in the case of any distribu14 tion described in clause (i)(I), age 

701 15 ⁄2, and 

16 ‘‘(II) in the case of any distribu17 tion described in clause (i)(II), age 

18 65. 

19 ‘‘(D) SPECIAL RULES RELATING TO DIS20 TRIBUTIONS.—For purposes of this para21 graph— 

22 ‘‘(i) DISTRIBUTION MUST BE OTHER23 WISE INCLUDIBLE.—A distribution from 

24 an individual retirement account shall be 

25 treated as a qualified charitable distribuVerDate Sep 11 2014 23:12 May 03, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1257.IS S1257

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1 tion only to the extent that the distribution 

2 would be includible in gross income with3 out regard to subparagraph (A). 

4 ‘‘(ii) LIMITATION ON INCOME INTER5 ESTS.—A distribution from an individual 

6 retirement account to a split-interest entity 

7 shall be treated as a qualified charitable 

8 distribution only if— 

9 ‘‘(I) no person holds an income 

10 interest in the split-interest entity 

11 other than the individual for whose 

12 benefit such account is maintained, 

13 the spouse of such individual, or both, 

14 and 

15 ‘‘(II) the income interest in the 

16 split-interest entity is nonassignable. 

17 ‘‘(iii) CONTRIBUTIONS MUST BE OTH18 ERWISE DEDUCTIBLE.—A distribution 

19 from an individual retirement account to a 

20 specified charitable organization shall be 

21 treated as a qualified charitable distribu22 tion only if— 

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

24 to a charitable remainder annuity 

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1 trust, a deduction for the entire value 

2 of the remainder interest in the dis3 tribution for the benefit of a specified 

4 charitable organization would be al5 lowable under section 170 (determined 

6 without regard to subsection (b) 

7 thereof and this paragraph), and 

8 ‘‘(II) in the case of a charitable 

9 gift annuity, a deduction in an 

10 amount equal to the amount of the 

11 distribution reduced by the value of 

12 the annuity described in section 

13 501(m)(5)(B) would be allowable 

14 under section 170 (determined with15 out regard to subsection (b) thereof 

16 and this paragraph). 

17 ‘‘(E) SPECIFIED CHARITABLE ORGANIZA18 TION.—For purposes of this paragraph, the 

19 term ‘specified charitable organization’ means 

20 an organization described in section 

21 170(b)(1)(A) (other than any organization de22 scribed in section 509(a)(3) or any fund or ac23 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 of 5 percent or 

17 greater not later than 1 year from the date 

18 of funding. 

19 ‘‘(G) SPECIAL RULES.— 

20 ‘‘(i) CHARITABLE REMAINDER

21 TRUSTS.—Notwithstanding section 664(b), 

22 distributions made from a trust described 

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

24 shall be treated as ordinary income in the 

25 hands of the beneficiary to whom the anVerDate Sep 11 2014 23:12 May 03, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1257.IS S1257

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1 nuity described in section 664(d)(1)(A) or 

2 the payment described in section 

3 664(d)(2)(A) is paid. 

4 ‘‘(ii) CHARITABLE GIFT ANNUITIES.— 

5 Qualified charitable distributions made to 

6 fund a charitable gift annuity shall not be 

7 treated as an investment in the contract 

8 for purposes of section 72(c). 

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

10 Notwithstanding section 72, in determining 

11 the extent to which a distribution is a 

12 qualified charitable distribution, the entire 

13 amount of the distribution shall be treated 

14 as includible in gross income to the extent 

15 that such amount does not exceed the ag16 gregate amount which would have been so 

17 includible if all amounts in all individual 

18 retirement plans of the individual were dis19 tributed during the taxable year and all 

20 such plans were treated as 1 contract for 

21 purposes of determining under section 72 

22 the aggregate amount which would have 

23 been so includible. Proper adjustments 

24 shall be made in applying section 72 to 


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1 other distributions in such taxable year 

2 and subsequent taxable years. 

3 ‘‘(iv) DETERMINING DEDUCTION

4 UNDER SECTION 170.—Qualified charitable 

5 distributions shall not be taken into ac6 count in determining the deduction under 

7 section 170. 

8 ‘‘(v) REQUIRED MINIMUM DISTRIBU9 TIONS.—The entire amount of a qualified 

10 charitable distribution shall be taken into 

11 account for purposes of section 401(a)(9). 

12 ‘‘(H) TERMINATION WITH RESPECT TO

13 SPLIT-INTEREST ENTITIES.—Subparagraph (A) 

14 shall not apply to a distribution to a split-inter15 est entity in taxable years beginning after the 

16 date which is 4 years after the date of the en17 actment of the Legacy IRA Act.’’. 

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

19 this section shall apply to distributions made in taxable 

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

Æ 


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