‘‘(ii) in the case of a person who is 
the estate of such beneficiary, in such 
beneficiary’s gross income for the last tax-
able year of such beneficiary. 
‘‘(C) SPECIAL RULES.— 
‘‘(i) REDUCTION OF INCLUSION FOR 
PREDEATH
EXPENSES.—The amount in-
cludible in gross income under subpara-
graph (B) shall be reduced by the amounts 
described in paragraph (2) which were in-
curred by the decedent before the date of 
the decedent’s death and paid by such per-
son within 1 year after such date. 
‘‘(ii) 
DEDUCTION
FOR
ESTATE 
TAXES.—An appropriate deduction shall be 
allowed under section 691(c) to any person 
(other than the decedent) with respect to 
amounts included in gross income under 
clause (i) by such person. 
‘‘(4) MANDATORY
DISTRIBUTION
RULES
NOT 
TO APPLY.—Section 401(a)(9)(A) and the incidental 
death benefit requirements of section 401(a) shall 
not apply to any Small Business Start-up Savings 
Account.’’. 
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(b) EXCESS CONTRIBUTIONS.—Section 4973 of the 
Internal Revenue Code of 1986 is amended by adding at 
the end the following new subsection: 
‘‘(h) EXCESS CONTRIBUTIONS TO SMALL BUSINESS 
START-UP SAVINGS ACCOUNTS.—For purposes of this 
section, in the case of contributions to all Small Business 
Start-up Savings Accounts (within the meaning of section 
408B(b)) maintained for the benefit of an individual, the 
term ‘excess contributions’ means the sum of— 
‘‘(1) the excess (if any) of— 
‘‘(A) the amount contributed to such ac-
counts for the taxable year, over 
‘‘(B) the amount allowable as a contribu-
tion under section 408B(c)(2)(A) for such tax-
able year, and 
‘‘(2) the amount determined under this sub-
section for the preceding taxable year, reduced by 
the sum of— 
‘‘(A) the distributions out of the accounts 
for the taxable year, and 
‘‘(B) the excess (if any) of— 
‘‘(i) the maximum amount allowable 
as 
a 
contribution 
under 
section 
408B(c)(2)(A) for such taxable year, over 
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‘‘(ii) the amount contributed to such 
accounts for such taxable year, and 
‘‘(3) the excess (if any) of— 
‘‘(A) the excess (if any) of— 
‘‘(i) the aggregate amounts contrib-
uted to such accounts for all taxable years, 
over 
‘‘(ii) the aggregate amount allowable 
as 
contributions 
under 
section 
408B(c)(2)(B) for all taxable years, over 
‘‘(B) the amount determined under this 
paragraph for all preceding taxable years.’’. 
(c) CONFORMING AMENDMENT.—The table of sec-
tions for subpart A of part I of subchapter D of chapter 
1 of the Internal Revenue Code of 1986 is amended by 
inserting after the item relating to section 408A the fol-
lowing new item: 
‘‘Sec. 408B. Small Business Start-up Savings Accounts.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2011. 
Æ 
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