To amend the Internal Revenue Code of 1986 to allow a one-time election for a qualified charitable distribution to a split-interest entity and to inflation adjust the limits for qualified charitable distributions.
Bill: H.R.2909 | Sponsor: Rep. Beyer, Donald S., Jr. (D-VA)
Policy area: Taxation

Summary:
This bill allows taxpayers an election to make a qualified charitable distribution to a split-interest entity (i.e., a charitable remainder annuity trust, charitable remainder unitrust, or charitable gift annuity funded exclusively by qualified charitable distributions). The aggregate amount of distributions may not exceed $50,000, adjusted for inflation for taxable years beginning after 2022.

To amend the Internal Revenue Code of 1986 to allow a one-time election 
for a qualified charitable distribution to a split-interest entity and 
 to inflation adjust the limits for qualified charitable distributions.

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

SECTION 1. ONE-TIME ELECTION FOR QUALIFIED CHARITABLE DISTRIBUTION TO 
              SPLIT-INTEREST ENTITY; INCREASE IN QUALIFIED CHARITABLE 
              DISTRIBUTION LIMITATION.

    (a) One-Time Election for Qualified Charitable Distribution to 
Split-Interest Entity.--Section 408(d)(8) of such Code is amended by 
adding at the end the following new subparagraph:
                    ``(F) One-time election for qualified charitable 
                distribution to split-interest entity.--
                            ``(i) In general.--A taxpayer may for a 
                        taxable year elect under this subparagraph to 
                        treat as meeting the requirement of 
                        subparagraph (B)(i) any distribution from an 
                        individual retirement account which is made 
                        directly by the trustee to a split-interest 
                        entity, but only if--
                                    ``(I) an election is not in effect 
                                under this subparagraph for a preceding 
                                taxable year,
                                    ``(II) the aggregate amount of 
                                distributions of the taxpayer with 
                                respect to which an election under this 
                                subparagraph does not exceed $50,000, 
                                and
                                    ``(III) such distribution meets the 
                                requirements of clauses (iii) and (iv).
                            ``(ii) Split-interest entity.--For purposes 
                        of this subparagraph, the term `split-interest 
                        entity' means--
                                    ``(I) a charitable remainder 
                                annuity trust (as defined in section 
                                664(d)(1)), but only if such trust is 
                                funded exclusively by qualified 
                                charitable distributions,
                                    ``(II) a charitable remainder 
                                unitrust (as defined in section 
                                664(d)(2)), but only if such unitrust 
                                is funded exclusively by qualified 
                                charitable distributions, or
                                    ``(III) a charitable gift annuity 
                                (as defined in section 501(m)(5)), but 
                                only if such annuity is funded 
                                exclusively by qualified charitable 
                                distributions and commences fixed 
                                payments of 5 percent or greater not 
                                later than 1 year from the date of 
                                funding.
                            ``(iii) Contributions must be otherwise 
                        deductible.--A distribution meets the 
                        requirement of this clause only if--
                                    ``(I) in the case of a distribution 
                                to a charitable remainder annuity trust 
                                or a charitable remainder unitrust, a 
                                deduction for the entire value of the 
                                remainder interest in the distribution 
                                for the benefit of a specified 
                                charitable organization would be 
                                allowable under section 170 (determined 
                                without regard to subsection (b) 
                                thereof and this paragraph), and
                                    ``(II) in the case of a charitable 
                                gift annuity, a deduction in an amount 
                                equal to the amount of the distribution 
                                reduced by the value of the annuity 
                                described in section 501(m)(5)(B) would 
                                be allowable under section 170 
                                (determined without regard to 
                                subsection (b) thereof and this 
                                paragraph).
                            ``(iv) Limitation on income interests.--A 
                        distribution meets the requirements of this 
                        clause only if--
                                    ``(I) no person holds an income 
                                interest in the split-interest entity 
                                other than the individual for whose 
                                benefit such account is maintained, the 
                                spouse of such individual, or both, and
                                    ``(II) the income interest in the 
                                split-interest entity is nonassignable.
                            ``(v) Special rules.--
                                    ``(I) Charitable remainder 
                                trusts.--Notwithstanding section 
                                664(b), distributions made from a trust 
                                described in subclause (I) or (II) of 
                                clause (ii) shall be treated as 
                                ordinary income in the hands of the 
                                beneficiary to whom the annuity 
                                described in section 664(d)(1)(A) or 
                                the payment described in section 
                                664(d)(2)(A) is paid.
                                    ``(II) Charitable gift annuities.--
                                Qualified charitable distributions made 
                                to fund a charitable gift annuity shall 
                                not be treated as an investment in the 
                                contract for purposes of section 
                                72(c).''.
    (b) Inflation Adjustment.--Section 408(d)(8) of such Code, as 
amended by subsection (a), is amended by adding at the end the 
following new subparagraph:
                    ``(G) Inflation adjustment.--
                            ``(i) In general.--In the case of any 
                        taxable year beginning after 2022, each of the 
                        dollar amounts in subparagraphs (A) and (F) 
                        shall be increased by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) 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.
                            ``(ii) Rounding.--If any dollar amount 
                        increased under clause (i) is not a multiple of 
                        $1,000, such dollar amount shall be rounded to 
                        the nearest multiple of $1,000.''.
    (c) Effective Date.--The amendment made by this section shall apply 
to distributions made in taxable years ending after the date of the 
enactment of this Act.
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