‘‘(b) TRUSTS CLAIMING A CHARITABLE DEDUCTION 
UNDER SECTION 642(c).—
‘‘(1) IN GENERAL.—Every trust not required to 
file a return under subsection (a) but claiming a de-
duction under section 642(c) for the taxable year 
shall furnish such information with respect to such 
taxable year as the Secretary may by forms or regu-
lations prescribe, including—
‘‘(A) the amount of the deduction taken 
under section 642(c) within such year, 
‘‘(B) the amount paid out within such year 
which represents amounts for which deductions 
under section 642(c) have been taken in prior 
years,
‘‘(C) the amount for which such deductions 
have been taken in prior years but which has 
not been paid out at the beginning of such year, 
‘‘(D) the amount paid out of principal in 
the current and prior years for the purposes de-
scribed in section 642(c), 
‘‘(E) the total income of the trust within 
such year and the expenses attributable thereto, 
and
‘‘(F) a balance sheet showing the assets, li-
abilities, and net worth of the trust as of the 
beginning of such year. 
‘‘(2) EXCEPTIONS.—Paragraph (1) shall not 
apply to a trust for any taxable year if—
‘‘(A) all the net income for such year, de-
termined under the applicable principles of the 
law of trusts, is required to be distributed cur-
rently to the beneficiaries, or 
‘‘(B) the trust is described in section 
4947(a)(1).’’. 
(2) INCREASE IN PENALTY RELATING TO FIL-
ING OF INFORMATION RETURN BY SPLIT-INTEREST 
TRUSTS.—Paragraph (2) of section 6652(c) (relating 
to returns by exempt organizations and by certain 
trusts) is amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(C) SPLIT-INTEREST
TRUSTS.—In the 
case of a trust which is required to file a return 
under section 6034(a), subparagraphs (A) and 
(B) of this paragraph shall not apply and para-
graph (1) shall apply in the same manner as if 
such return were required under section 6033, 
except that—
‘‘(i) the 5 percent limitation in the 
second sentence of paragraph (1)(A) shall 
not apply, 
‘‘(ii) in the case of any trust with 
gross income in excess of $250,000, the 
first sentence of paragraph (1)(A) shall be 
applied by substituting ‘$100’ for ‘$20’, 
and the second sentence thereof shall be 
applied by substituting ‘$50,000’ for 
‘$10,000’, and 
‘‘(iii) the third sentence of paragraph 
(1)(A) shall be disregarded. 
In addition to any penalty imposed on the trust 
pursuant to this subparagraph, if the person re-
quired to file such return knowingly fails to file 
the return, such penalty shall also be imposed 
on such person who shall be personally liable 
for such penalty.’’. 
(3) CONFIDENTIALITY
OF
NONCHARITABLE 
BENEFICIARIES.—Subsection (b) of section 6104 
(relating to inspection of annual information re-
turns) is amended by adding at the end the fol-
lowing new sentence: ‘‘In the case of a trust which 
is required to file a return under section 6034(a), 
this subsection shall not apply to information re-
garding beneficiaries which are not organizations de-
scribed in section 170(c).’’. 
(c) EFFECTIVE DATES.—
(1) SUBSECTION (a).—The amendment made 
by subsection (a) shall apply to distributions made 
after December 31, 2003. 
(2) SUBSECTION (b).—The amendments made 
by subsection (b) shall apply to returns for taxable 
years beginning after December 31, 2003. 
SEC. 103. INCREASE IN CAP ON CORPORATE CHARITABLE 
CONTRIBUTIONS. 
(a) IN GENERAL.—Paragraph (2) of section 170(b) 
(relating to corporations) is amended by striking ‘‘10 per-
cent’’ and inserting ‘‘the applicable percentage’’. 
(b) APPLICABLE PERCENTAGE.—Subsection (b) of 
section 170 is amended by adding at the end the following 
new paragraph: 
‘‘(3) APPLICABLE PERCENTAGE DEFINED.—For 
purposes of paragraph (2), the applicable percentage 
shall be determined in accordance with the following 
table:
‘‘For taxable years beginning 
The applicable 
in calendar year—
percentage is—
2004 .............................................................................
2005 .............................................................................
2006 .............................................................................
2007 .............................................................................
2008 through 2011 ......................................................
2012 and thereafter .....................................................
20.’’.
(c) CONFORMING AMENDMENTS.—
(1) Sections 512(b)(10) and 805(b)(2)(A) are 
each amended by striking ‘‘10 percent’’ each place 
it occurs and inserting ‘‘the applicable percentage 
(determined under section 170(b)(3))’’.
(2) Sections 545(b)(2) and 556(b)(2) are each 
amended by striking ‘‘10-percent limitation’’ and in-
serting ‘‘applicable percentage limitation’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2003. 
SEC. 104. CHARITABLE DEDUCTION FOR CONTRIBUTIONS 
OF FOOD INVENTORY. 
(a) IN GENERAL.—Paragraph (3) of section 170(e) 
(relating to special rule for certain contributions of inven-
tory and other property) is amended by redesignating sub-
paragraph (C) as subparagraph (D) and by inserting after 
subparagraph (B) the following new subparagraph: 
‘‘(C) SPECIAL RULE FOR CONTRIBUTIONS 
OF FOOD INVENTORY.—
‘‘(i) GENERAL RULE.—In the case of 
a charitable contribution of food, this para-
graph shall be applied—
‘‘(I) without regard to whether 
the contribution is made by a C cor-
poration, and 
‘‘(II) only for food that is appar-
ently wholesome food. 
‘‘(ii) LIMITATION.—In the case of tax-
payer other than a C corporation, clause 
(i) shall not apply to any contribution of 
apparently wholesome food from a trade or 
business of the taxpayer to the extent that 
such contribution exceeds the applicable 
percentage (within the meaning of sub-
section (b)(3)) of the amount of net in-
come of the taxpayer from the trade or 
business with respect to which such food is 
inventory. For purposes of the preceding 
sentence, the amount of net income of the 
taxpayer from a trade or business is the 
excess of—
‘‘(I) the aggregate amount of 
gross income from such trade or busi-
ness received or accrued by the tax-
payer during the taxable year, over 
‘‘(II) the aggregate amount of 
any deductions allocable to such trade
date of the enactment of this subpara-
graph.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
section shall apply to taxable years beginning after De-
cember 31, 2003. 
SEC. 105. REFORM OF CERTAIN EXCISE TAXES RELATED TO 
PRIVATE FOUNDATIONS. 
(a) REDUCTION OF TAX ON NET INVESTMENT IN-
COME.—Subsection (a) of section 4940 (relating to excise 
tax based on investment income) is amended by striking 
‘‘2 percent’’ and inserting ‘‘1 percent’’. 
(b) REPEAL OF REDUCTION IN TAX WHERE PRI-
VATE FOUNDATION MEETS CERTAIN DISTRIBUTION RE-
QUIREMENTS.—Section 4940 is amended by striking sub-
section (e). 
(c) MODIFICATION OF EXCISE TAX ON FAILURE TO 
DISTRIBUTE INCOME.—
(1) ADMINISTRATIVE EXPENSES NOT TREATED 
AS
DISTRIBUTIONS.—Subparagraph (A) of section 
4942(g)(1) is amended by striking ‘‘including that 
portion of reasonable and necessary administrative 
expenses’’ and inserting ‘‘excluding administrative 
expenses’’.
(2) EXCLUSION
NOT
TO
APPLY
TO
CERTAIN 
PRIVATE FOUNDATIONS.—Paragraph (3) of section 
4942(j) is amended—
(A) by striking ‘‘(within the meaning of 
paragraph (1) or (2) of subsection (g))’’ each 
place it appears, and 
(B) by inserting at the end the following: 
‘‘For purposes of this paragraph, the term 
‘qualifying distributions’ means qualifying dis-
tributions within the meaning of paragraph (1) 
or (2) of subsection (g), except that ‘including 
that portion of reasonable and necessary admin-
istrative expenses’ shall be substituted for ‘ex-
cluding administrative expenses’ in subsection 
(g)(1)(A).’’. 
(3) CONFORMING AMENDMENT.—Subsection (g) 
of section 4942 is amended by striking paragraph 
(4). 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2003.
SEC. 106. EXCISE TAX ON UNRELATED BUSINESS TAXABLE 
INCOME 
OF 
CHARITABLE 
REMAINDER 
TRUSTS. 
(a) IN GENERAL.—Subsection (c) of section 664 (re-
lating to exemption from income taxes) is amended to read 
as follows: 
‘‘(c) TAXATION OF TRUSTS.—
‘‘(1) INCOME TAX.—A charitable remainder an-
nuity trust and a charitable remainder unitrust 
shall, for any taxable year, not be subject to any tax 
imposed by this subtitle. 
‘‘(2) EXCISE TAX.—
‘‘(A) IN GENERAL.—In the case of a chari-
table remainder annuity trust or a charitable 
remainder unitrust that has unrelated business 
taxable income (within the meaning of section 
512, determined as if part III of subchapter F 
applied to such trust) for a taxable year, there 
is hereby imposed on such trust or unitrust an 
excise tax equal to the amount of such unre-
lated business taxable income. 
‘‘(B) CERTAIN RULES TO APPLY.—The tax 
imposed by subparagraph (A) shall be treated 
as imposed by chapter 42 for purposes of this 
title other than subchapter E of chapter 42.
‘‘(C) CHARACTER OF DISTRIBUTIONS AND 
COORDINATION WITH DISTRIBUTION REQUIRE-
MENTS.—The amounts taken into account in 
determining unrelated business taxable income 
(as defined in subparagraph (A)) shall not be 
taken into account for purposes of—
‘‘(i) subsection (b), 
‘‘(ii) determining the value of trust 
assets under subsection (d)(2), and 
‘‘(iii) determining income under sub-
section (d)(3). 
‘‘(D) TAX
COURT
PROCEEDINGS.—For 
purposes of this paragraph, the references in 
section 6212(c)(1) to section 4940 shall be 
deemed to include references to this para-
graph.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2003. 
SEC. 107. EXPANSION OF CHARITABLE CONTRIBUTION AL-
LOWED FOR SCIENTIFIC PROPERTY USED 
FOR RESEARCH AND FOR COMPUTER TECH-
NOLOGY AND EQUIPMENT USED FOR EDU-
CATIONAL PURPOSES. 
(a) SCIENTIFIC PROPERTY USED FOR RESEARCH.—
(1) IN
GENERAL.—Clause (ii) of section 
170(e)(4)(B) (defining qualified research contribu-
tions) is amended by inserting ‘‘or assembled’’ after 
‘‘constructed’’. 
(2) CONFORMING AMENDMENT.—Clause (iii) of 
section 170(e)(4)(B) is amended by inserting ‘‘or as-
sembling’’ after ‘‘construction’’. 
(b) COMPUTER TECHNOLOGY AND EQUIPMENT FOR 
EDUCATIONAL PURPOSES.—
(1) IN
GENERAL.—Clause (ii) of section 
170(e)(6)(B) is amended by inserting ‘‘or assem-
bled’’ after ‘‘constructed’’ and ‘‘or assembling’’ after 
‘‘construction’’.
(2) 
SPECIAL
RULE
EXTENDED.—Section 
170(e)(6)(G) is amended by striking ‘‘2003’’ and in-
serting ‘‘2005’’. 
(3) 
CONFORMING
AMENDMENTS.—Subpara-
graph (D) of section 170(e)(6) is amended by insert-
ing ‘‘or assembled’’ after ‘‘constructed’’ and ‘‘or as-
sembling’’ after ‘‘construction’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2003.