Family Attribution Modernization Act

Bill: 117-hr-2796
Sponsor: full_name: Rep. Panetta, Jimmy [D-CA-20]
Introduced: 2021-04-22
Policy area: Taxation
Subjects: Employee benefits and pensions

Family relationships

Securities

Small business

Tax administration and collection, taxpayers
Latest action: action_date: 2021-04-22
text: Referred to the House Committee on Ways and Means.

Summaries:
action_date: 2021-04-22
action_desc: Introduced in House
text: <p><strong>Family Attribution Modernization Act</strong></p> <p>This bill modifies testing rules for tax-exempt pension and profit sharing plans (e.g., 401k retirement plans) to eliminate attribution under the the family attribution rules (1) for spouses with separate businesses who reside in community property states, and (2) between parents with separate businesses who have minor children. The<em> family attribution rule</em> treats an individual taxpayer as owning property interests (e.g., stock) that are owned, directly or indirectly, by the individual's spouse, children, grandchildren, and parents.</p>

tv_txt: I 117th CONGRESS 1st Session H. R. 2796 IN THE HOUSE OF REPRESENTATIVES April 22, 2021 Mr. Panetta (for himself and Mr. Arrington ) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend section 414 of the Internal Revenue Code of 1986 to update the family attribution rule.

1. Short title This Act may be cited as the Family Attribution Modernization Act . 2. Reform of family attribution rule (a) In general Section 414 of the Internal Revenue Code of 1986 is amended— (1) in subsection (b)— (A) by striking For purposes of and inserting the following: (1) In general For purposes of , and (B) by adding at the end the following new paragraphs: (2) Special rules for applying family attribution For purposes of applying the attribution rules under section 1563 with respect to paragraph (1), the following rules apply: (A) Community property laws shall be disregarded for purposes of determining ownership. (B) Any ownership that is not attributed to a spouse by reason of section 1563(e)(5) shall also not be attributed to the minor children of the owner and the attribution rule in paragraph (6)(A) shall not apply to such ownership. (3) Plan shall not fail to be treated as satisfying this section If application of paragraph (2) causes two or more entities to be a controlled group, or an affiliated service group, or to no longer be in a controlled group or an affiliated service group, such change shall be treated as a transaction to which section 410(b)(6)(C) applies. , and (2) in subsection (m)(6)(B), by striking apply and inserting apply, except that community property laws shall be disregarded for purposes of determining ownership . (b) Effective date The amendments made by this section shall apply to plan years beginning on or after the date of the enactment of this section.