To amend the Internal Revenue Code of 1986 to allow a deduction for investment advisory expenses of certain funeral and cemetery trusts during suspension of miscellaneous itemized deductions, and for other purposes.
Bill: H.R.8020 | Sponsor: Rep. Sánchez, Linda T. (D-CA)
Policy area: Taxation

Summary:
This bill allows a tax deduction for the investment advisory expenses of certain funeral trusts and cemetery perpetual care funds during the period in which the allowance of miscellaneous itemized deductions is suspended (i.e., 2018 through 2025).
The bill also revises provisions relating to distributions by cemetery perpetual funds for the care and maintenance of gravesites. The aggregate amount of such distributions may not exceed $25 (adjusted for inflation) multiplied by the aggregate number of such gravesites.

To amend the Internal Revenue Code of 1986 to allow a deduction for 
  investment advisory expenses of certain funeral and cemetery trusts 
 during suspension of miscellaneous itemized deductions, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. DEDUCTION FOR INVESTMENT ADVISORY EXPENSES OF CERTAIN 
              FUNERAL AND CEMETERY TRUSTS ALLOWED DURING SUSPENSION OF 
              MISCELLANEOUS ITEMIZED DEDUCTIONS.

    (a) In General.--Section 67(g) of the Internal Revenue Code of 1986 
is amended--
            (1) by striking ``Notwithstanding'' and inserting the 
        following:
            ``(1) In general.--Notwithstanding'', and
            (2) by adding at the end the following new paragraph:
            ``(2) Deduction for investment advisory expenses of certain 
        funeral and cemetery trusts allowed during suspension.--In the 
        case of any qualified funeral trust (as defined in section 
        685(b)) or cemetery perpetual care fund (described in section 
        642(i) and meeting the requirements of paragraphs (1) and (2) 
        thereof), subsection (a) and paragraph (1) of this subsection 
        shall not apply to any deduction allowed for investment 
        advisory expenses for a taxable year beginning after December 
        31, 2021, and before January 1, 2028.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2021.

SEC. 2. SPECIAL RULE FOR DISTRIBUTIONS BY CEMETERY PERPETUAL FUNDS 
              INDEXED TO INFLATION.

    (a) In General.--Section 642(i) of the Internal Revenue Code of 
1986 is amended to read as follows:
    ``(i) Certain Distributions by Cemetery Perpetual Care Funds.--
            ``(1) In general.--In the case of a cemetery perpetual care 
        fund which--
                    ``(A) was created pursuant to local law by a 
                taxable cemetery corporation for the care and 
                maintenance of cemetery property, and
                    ``(B) is treated for the taxable year as a trust 
                for purposes of this subchapter, any amount distributed 
                by such fund for the care and maintenance of gravesites 
                which have been purchased from the cemetery corporation 
                before the beginning of the taxable year of the trust 
                and with respect to which there is an obligation to 
                furnish care and maintenance shall be considered to be 
                a distribution solely for purposes of sections 651 and 
                661, but only to the extent that the aggregate amount 
                so distributed during the taxable year does not exceed 
                $25 multiplied by the aggregate number of such 
                gravesites.
            ``(2) Inflation adjustment.--In the case of any taxable 
        year to which this subsection applies and which begins after 
        2022, the $25 amount in paragraph (1)(A) shall be increased by 
        an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `calendar year 2021' for `calendar year 2016' in 
                subparagraph (A)(ii) thereof.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2021.
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