‘‘(A) IN GENERAL.—Any contribution to a 
qualified down payment savings program on be-
half of any designated beneficiary shall be 
treated as a completed gift to such beneficiary 
which is not a future interest in property. 
‘‘(B) TREATMENT OF EXCESS CONTRIBU-
TIONS.—If the aggregate amount of contribu-
tions described in subparagraph (A) during the 
calendar year by a donor exceeds the limitation 
for such year under section 2503(b), such ag-
gregate amount shall, at the election of the 
donor, be taken into account for purposes of 
such section ratably over the 5-year period be-
ginning with such calendar year. 
‘‘(3) DISTRIBUTIONS.— 
‘‘(A) 
IN
GENERAL.—Any 
distribution 
under a qualified down payment savings pro-
gram shall be includible in the gross income of 
the distributee in the manner as provided under 
section 72 to the extent not excluded from gross 
income under any other provision of this chap-
ter. 
‘‘(B) 
DISTRIBUTIONS
FOR
QUALIFIED 
DOWN PAYMENT EXPENSES.—For purposes of 
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this paragraph, if distributions from a qualified 
down payment savings program— 
‘‘(i) do not exceed the qualified down 
payment expenses, no amount shall be in-
cludible in gross income, and 
‘‘(ii) in any other case, the amount 
otherwise includible in gross income shall 
be reduced by an amount which bears the 
same ratio to such amount as such ex-
penses bear to such distributions. 
‘‘(C) ROLLOVERS.— 
‘‘(i) IN GENERAL.—Subparagraph (A) 
shall not apply to that portion of any dis-
tribution which, within 60 days of such 
distribution, is transferred to another 
qualified down payment savings account 
for the benefit of the designated bene-
ficiary. 
‘‘(ii) LIMITATION ON CERTAIN ROLL-
OVERS.—Clause (i) shall not apply to any 
transfer if such transfer occurs within 12 
months from the date of a previous trans-
fer to any qualified down payment savings 
account for the benefit of the designated 
beneficiary. 
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‘‘(4) ESTATE TAX TREATMENT.— 
‘‘(A) IN GENERAL.—No amount shall be 
includible in the gross estate of any individual 
for purposes of chapter 11 by reason of an in-
terest in a qualified down payment savings pro-
gram. 
‘‘(B) AMOUNTS INCLUDIBLE IN ESTATE OF 
DESIGNATED
BENEFICIARY
IN
CERTAIN 
CASES.—Subparagraph (A) shall not apply to 
amounts distributed on account of the death of 
a beneficiary. 
‘‘(C) AMOUNTS INCLUDIBLE IN ESTATE OF 
DONOR
MAKING
EXCESS
CONTRIBUTIONS.—In 
the case of a donor who makes the election de-
scribed in paragraph (2)(B) and who dies be-
fore the close of the 5-year period referred to 
in such paragraph, notwithstanding subpara-
graph (A), the gross estate of the donor shall 
include the portion of such contributions prop-
erly allocable to periods after the date of death 
of the donor. 
‘‘(5) OTHER GIFT TAX RULES.—For purposes 
of chapters 12 and 13, in no event shall a distribu-
tion from a qualified down payment savings account 
be treated as a taxable gift. 
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‘‘(6) ADDITIONAL TAX.— 
‘‘(A) IN GENERAL.—The tax imposed by 
this chapter for any taxable year on any tax-
payer who receives a distribution from a quali-
fied down payment savings program which is 
includible in gross income shall be increased by 
10 percent of the amount which is so includible. 
‘‘(B) 
EXCEPTIONS.—Subparagraph 
(A) 
shall not apply if the payment or distribution 
is— 
‘‘(i) made to a beneficiary (or to the 
estate of the designated beneficiary) on or 
after the death of the designated bene-
ficiary, or 
‘‘(ii) attributable to the designated 
beneficiary’s being disabled (within the 
meaning of section 72(m)(7)). 
‘‘(C) CONTRIBUTIONS RETURNED BEFORE 
CERTAIN
DATE.—Subparagraph (A) shall not 
apply to the distribution of any contribution 
made during a taxable year on behalf of the 
designated beneficiary if— 
‘‘(i) such distribution is received on or 
before the day prescribed by law (including 
extensions of time) for filing such des-
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ignated beneficiary’s return for such tax-
able year, and 
‘‘(ii) such distribution is accompanied 
by the amount of net income attributable 
to such excess contribution. 
‘‘(d) REPORTS.—Each officer or employee having 
control of the qualified down payment savings program or 
their designee shall make such reports regarding such pro-
gram to the Secretary and to designated beneficiaries with 
respect to contributions, distributions, and such other 
matters as the Secretary may require. The reports re-
quired by this subsection shall be filed at such time and 
in such manner and furnished to such individuals at such 
time and in such manner as may be required by the Sec-
retary. 
‘‘(e) OTHER DEFINITIONS AND SPECIAL RULES.— 
For purposes of this section— 
‘‘(1) DESIGNATED
BENEFICIARY.—The term 
‘designated beneficiary’ means the individual des-
ignated at the commencement of participation in the 
qualified down payment savings program as the ben-
eficiary of amounts paid (or to be paid) to the pro-
gram. 
‘‘(2) QUALIFIED DOWN PAYMENT EXPENSES.— 
The term ‘qualified down payment expenses’ means 
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amounts (including closing costs) paid or incurred to 
purchase a principal residence (within the meaning 
of section 121). 
‘‘(3) QUALIFIED DOWN PAYMENT SAVINGS AC-
COUNT.—The term ‘qualified down payment savings 
account’ means an account maintained under a 
qualified down payment savings program. 
‘‘(f) REGULATIONS.—Notwithstanding any other pro-
vision of this section, the Secretary, in consultation with 
the Chairman of the Securities and Exchange Commis-
sion, shall prescribe such regulations as may be necessary 
or appropriate to carry out the purposes of this section 
and to prevent abuse of such purposes. Such regulations 
shall include— 
‘‘(1) impermissible investments for qualified 
down payment savings programs; 
‘‘(2) permissible fees, including the maximum 
amount of overall fees and commissions, that may be 
charged in association with a qualified down pay-
ment savings program account; and 
‘‘(3) minimum required disclosures to account 
beneficiaries, including disclosures related to any 
possible losses that could be incurred in a qualified 
down payment savings account.’’. 
(b) TAX ON EXCESS CONTRIBUTIONS.— 
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(1) IN
GENERAL.—Subsection (a) of section 
4973 of the Internal Revenue Code of 1986 is 
amended by striking ‘‘or’’ at the end of paragraph 
(5), by inserting ‘‘or’’ at the end of paragraph (6), 
and by inserting after paragraph (6) the following 
new paragraph: 
‘‘(7) a qualified down payment savings account 
(within the meaning of section 529B),’’. 
(2) EXCESS CONTRIBUTION.—Section 4973 of 
such Code is amended by adding at the end the fol-
lowing new subsection: 
‘‘(i) EXCESS CONTRIBUTIONS TO QUALIFIED DOWN 
PAYMENT SAVINGS ACCOUNTS.—For purposes of this sec-
tion— 
‘‘(1) IN GENERAL.—In the case of a qualified 
down payment savings account (within the meaning 
of section 529B), the term ‘excess contributions’ 
means the amount by which the amount contributed 
for the taxable year to such account (other than con-
tributions under section 529B(c)(3)(C)) exceeds the 
contribution limit under section 529B(b)(2)(B). 
‘‘(2) SPECIAL RULE.—For purposes of this sub-
section, any contribution which is distributed out of 
the qualified down payment savings account in a dis-
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tribution to which section 529B(c)(6)(C) applies 
shall be treated as an amount not contributed.’’. 
(c) PENALTY FOR FAILURE TO FILE REPORTS.— 
Section 6693(a)(2) is amended by striking ‘‘and’’ at the 
end of subparagraph (E), by redesignating subparagraph 
(F) as subparagraph (G), and by inserting after subpara-
graph (E) the following: 
‘‘(E) section 529B(d) (relating to qualified 
down payment savings programs), and’’. 
(d) OTHER CONFORMING AMENDMENTS.— 
(1) Section 26(b)(2) of the Internal Revenue 
Code of 1986 is amended by striking ‘‘and’’ at the 
end of subparagraph (X), by striking the period at 
the end of subparagraph (Y) and inserting ‘‘, and’’, 
and by inserting after subparagraph (Y) the fol-
lowing: 
‘‘(Z) section 529B(c)(6) (relating to addi-
tional tax on qualified down payment savings 
program distributions not used for qualified 
down payment expenses).’’. 
(2) Section 877A of such Code is amended— 
(A) in subsection (e)(2) by inserting ‘‘a 
qualified down payment savings program (as 
defined in section 529B),’’ after ‘‘a qualified 
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ABLE program (as defined in section 529A),’’, 
and 
(B) in subsection (g)(6) by inserting 
‘‘529B(c)(6),’’ after ‘‘529A(c)(3),’’. 
(3) Section 4965(c) of such Code is amended by 
striking ‘‘or’’ at the end of paragraph (7), by strik-
ing the period at the end of paragraph (8) and in-
serting ‘‘, or’’, and by inserting after paragraph (8) 
the following new paragraph: 
‘‘(9) a program described in section 529B.’’. 
(4) The table of sections for part VIII of sub-
chapter F of chapter 1 of such Code is amended by 
inserting after the item relating to section 529A the 
following new item: 
‘‘Sec. 529B. Qualified down payment savings programs.’’. 
(e) REPORTS ON DOWN PAYMENT SAVINGS PRO-
GRAMS.—Beginning on that date that is 12 months after 
the regulations established pursuant to section 529B(f) 
are finalized, and every two years thereafter, the Secretary 
of the Treasury (or the Secretary’s delegate), in coordina-
tion with the Chairman of the Securities and Exchange 
Commission and the States offering qualified down pay-
ment savings programs, shall issue a public report detail-
ing the following: 
(1) The number of States that have established 
qualified down payment savings programs. 
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(2) The number of down payment savings pro-
gram accounts in existence during the time specified 
in the report and the number of such accounts that 
have been established over the life of the program. 
(3) The age distribution of down payment sav-
ings account beneficiaries. 
(4) The percentage of qualified down payment 
savings account beneficiaries that would be first-time 
homebuyers. 
(5) A summary of the account balances held in 
qualified down payment savings program accounts. 
(6) The race and gender distribution of quali-
fied down payment savings program account des-
ignated beneficiaries. 
(7) The income distribution of the designated 
beneficiaries of qualified down payment savings pro-
gram accounts. 
(8) The number of down payment savings pro-
gram distributions that have been made since the 
previous report. 
(9) Such other information as the Secretary (or 
the Secretary’s designee) shall determine is required 
to assess whether qualified down payment savings 
accounts have contributed to facilitating access to 
affordable 
homeownership, 
including 
first-time 
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homeownership, particularly among young people, 
low- and moderate-income people, and people from 
communities with historically low rates of homeown-
ership. 
(f) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by 
this section shall apply to taxable years beginning 
after December 31, 2019. 
(2) REGULATIONS.—The Secretary of the 
Treasury (or the Secretary’s designee) shall promul-
gate the regulations or other guidance required 
under section 529B(f) of the Internal Revenue Code 
of 1986, as added by subsection (a), not later than 
6 months after the date of the enactment of this 
Act. 
Æ 
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