(1) by striking subparagraphs (A) and (B) and 
by redesignating subparagraphs (C), (D), (E), and 
(F) as subparagraphs (A), (B), (C), and (D), respec-
tively, and 
(2) by striking ‘‘such bank or company’’ in sub-
paragraph (A) (as so redesignated) and inserting 
‘‘the issuer of such stock’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on January 1, 2024. 
SEC. 7. TRANSFER OF SUSPENDED LOSSES INCIDENT TO 
DEATH. 
(a) IN GENERAL.—Section 1366(d)(2)(B) is amend-
ed by inserting ‘‘, or any transfer incident to the death 
of the transferor,’’ after ‘‘any transfer described in section 
1041(a)’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to transfers incident to deaths oc-
curring after the date of the enactment of this Act. 
SEC. 8. REPEAL OF INCLUSION IN GROSS INCOME OF DE-
FERRED 
COMPENSATION 
UNDER 
NON-
QUALIFIED 
DEFERRED 
COMPENSATION 
PLANS. 
(a) IN GENERAL.—Subpart A of part I of subchapter 
D of chapter 1 is amended by striking section 409A (and 
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by striking the item relating to such section from the table 
of sections for such subpart). 
(b) CONFORMING AMENDMENTS.— 
(1) Section 26(b)(2) is amended by striking 
subparagraph (V) and by redesignating subpara-
graphs (W) through (Z) as subparagraphs (V) 
through (Y), respectively. 
(2) Section 430(c)(7)(D)(iv)(I) is amended by 
inserting ‘‘as in effect before its repeal’’ after ‘‘sec-
tion 409A’’. 
(3)(A) Section 457A is amended by redesig-
nating subsections (d) and (e) as subsections (e) and 
(f) and by inserting after subsection (c) the fol-
lowing new subsection: 
‘‘(d) NONQUALIFIED
DEFERRED
COMPENSATION 
PLAN.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘nonqualified de-
ferred compensation’ plan means— 
‘‘(A) any plan that provides for the defer-
ral of compensation, other than— 
‘‘(i) a qualified employer plan, and 
‘‘(ii) any bona fide vacation leave, sick 
leave, compensatory time, disability pay, or 
death benefit plan, and 
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‘‘(B) any plan that provides a right to 
compensation based on the appreciation in 
value of a specified number of equity units of 
the service recipient. 
‘‘(2) QUALIFIED EMPLOYER PLAN.—The term 
‘qualified employer plan’ means— 
‘‘(A) any plan, contract, pension, account, 
or trust described in subparagraph (A) or (B) 
of section 219(g)(5) (without regard to sub-
paragraph (A)(iii)), 
‘‘(B) any eligible deferred compensation 
plan (within the meaning of section 457(b)), 
and 
‘‘(C) any plan described in section 415(m). 
‘‘(3) PLAN INCLUDES ARRANGEMENTS, ETC.— 
The term ‘plan’ includes any agreement or arrange-
ment, including an agreement or arrangement that 
includes one person. 
‘‘(4) TREATMENT OF EARNINGS.—References to 
deferred compensation shall be treated as including 
references to income (whether actual or notional) at-
tributable to such compensation or such income. 
‘‘(5) AGGREGATION RULES.— Except as pro-
vided by the Secretary, rules similar to the rules of 
subsections (b) and (c) of section 414 shall apply. 
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‘‘(6) TREATMENT OF QUALIFIED STOCK.—An 
arrangement under which an employee may receive 
qualified stock (as defined in section 83(i)(2)) shall 
not be treated as a nonqualified deferred compensa-
tion plan with respect to such employee solely be-
cause of such employee’s election, or ability to make 
an election, to defer recognition of income under sec-
tion 83(i).’’. 
(B) Section 457A(e)(3), as redesignated by sub-
paragraph (A), is amended to read as follows: 
‘‘(3) 
12-MONTH
EXCEPTION.—Compensation 
shall not be treated as deferred for purposes of this 
section if the service provider receives payment of 
such compensation not later than 12 months after 
the end of the taxable year of the service recipient 
during which the right to the payment of such com-
pensation is no longer subject to a substantial risk 
of forfeiture.’’. 
(C) Section 457A(e), as redesignated by sub-
paragraph (A), is amended by striking paragraph 
(5). 
(4) Section 877A(g)(6) is amended by striking 
‘‘409A(a)(1)(B),’’. 
(5) Section 3401(a) is amended by striking the 
last sentence. 
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(6) Section 6041 is amended by striking sub-
section (g). 
(7) Section 6051(a) is amended— 
(A) by striking paragraph (13) and 
redesginating paragraphs (14) through (17) as 
paragraphs (13) through (16), respectively, and 
(B) by striking the last sentence. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2023. 
Æ 
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