Family Attribution Modernization Act

Bill: 117-s-5125
Sponsor: full_name: Sen. Kelly, Mark [D-AZ]
Introduced: 2022-11-17
Policy area: Taxation
Latest action: action_date: 2022-11-17
text: Read twice and referred to the Committee on Finance.

Summaries:
action_date: 2022-11-17
action_desc: Introduced in Senate
text: <p><strong>Family Attribution Modernization Act</strong></p> <p>This bill modifies family attribution rules for purposes of tax-exempt pension and profit sharing plans (e.g., 401k retirement plans) to provide that (1) community property laws shall be disregarded for purposes of determining ownership under attribution rules, and (2) attribution is eliminated for spouses and minor children under certain circumstances. 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: II 117th CONGRESS 2d Session S. 5125 IN THE SENATE OF THE UNITED STATES November 17, 2022 Mr. Kelly (for himself and Mr. Cassidy ) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to reform the application of family attribution rules for purposes of retirement plans.

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) Except as provided by the Secretary, stock of an individual not attributed under section 1563(e)(5) to such individual’s spouse shall not be attributed to such spouse by reason of 1563(e)(6)(A). (C) Except as provided by the Secretary, in the case of stock in different corporations that is attributed to a child under section 1563(e)(6)(A) from each parent, and is not attributed to such parents as spouses under section 1563(e)(5), such attribution to the child shall not by itself result in such corporations being members of the same controlled group. (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.