Instructions: In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
Input: SECTION 1. SHORT TITLE.

This Act may be cited as the ''Mobilized Reserve Savings Account
Act''.

SEC. 2. DEDUCTION FOR CONTRIBUTIONS TO SAVINGS ACCOUNTS OF ARMED FORCES
RESERVES.

(a) In General.--Part VII of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 (relating to additional itemized
deductions for individuals) is amended by redesignating section 223 as
section 224 and by inserting after section 222 the following new
section:

''SEC. 223. CONTRIBUTIONS TO ARMED FORCES RESERVE SAVINGS ACCOUNTS.

''(a) Deduction Allowed.--
''(1) In general.--In the case of an individual who is a
qualified reservist, there shall be allowed as a deduction for
the taxable year an amount equal to the contributions of the
individual to an Armed Forces reserve savings account of the
individual for the taxable year.
''(2) Maximum amount.--The amount allowable as a deduction
under subsection (a) to any individual for a taxable year shall
not exceed the lesser of--
''(A) $5,000, or
''(B) $25,000, reduced by the aggregate
contributions by such individual to Armed Forces
reserve savings accounts for all preceding taxable
years.
''(b) Qualified Reservist.--For purposes of this section, the term
'qualified reservist' means an individual who, on the last day of the
taxable year, is a member of a reserve component of the Armed Forces.
''(c) Armed Forces Reserve Savings Account.--For purposes of this
section, the term 'Armed Forces reserve savings account' means a trust
created or organized in the United States for the exclusive benefit of
an individual and the individual's beneficiaries, but only if the
written governing instrument creating the trust meets the following
requirements:
''(1) No contribution will be accepted unless it is in
cash.
''(2) The trustee is a bank (as defined in section 408(n))
or another person who demonstrates to the satisfaction of the
Secretary that the manner in which that person will administer
the trust will be consistent with the requirements of this
section.
''(3) No part of the trust assets will be invested in life
insurance contracts.
''(4) The assets of the trust will not be commingled with
other property except in a common trust fund or common
investment fund.
''(5) The interest of an individual in the balance of the
individual's account is nonforfeitable.
''(d) Tax Treatment of Distributions.--
''(1) In general.--Except as otherwise provided in this
subsection, any amount paid or distributed out of an Armed
Forces reserve savings account shall be included in the gross
income of the payee or distributee for the taxable year in
which the payment or distribution is received in the manner
provided under section 72.
''(2) Excess contributions returned before due date of
return.--Paragraph (1) shall not apply to the distribution of
any contribution paid during a taxable year to an Armed Forces
reserve savings account to the extent that such contribution
exceeds the amount allowable as a deduction under subsection
(a) if--
''(A) such distribution is received on or before
the day prescribed by law (including extensions of
time) for filing such individual's return for such
taxable year,
''(B) no deduction is allowed under subsection (a)
with respect to such excess contribution, and
''(C) such distribution is accompanied by the
amount of net income attributable to such excess
contribution.
Any net income described in subparagraph (C) shall be included
in the gross income of the individual for the taxable year in
which such excess contribution was made.
''(3) Rollover contribution.--
''(A) In general.--Paragraph (1) shall not apply to
any amount paid or distributed from an Armed Forces
reserve savings account to the account holder to the
extent the amount received is paid to another such
account for the benefit of such holder not later than
the 60th day on which the holder receives the payment
or distribution.
''(B) Limitation.--If an individual receives more
than 1 payment or distribution during any 12-month
period, this paragraph shall not apply to any such
payment or distribution to the individual if this
paragraph previously applied to any such payment or
distribution.
''(4) Additional tax on certain distributions.--
''(A) In general.--The tax imposed by this chapter
on the account holder for any taxable year in which
there is a payment or distribution from an Armed Forces
reserve account which is includible in gross income
shall be increased by 10 percent of the amount which is
so includible.
''(B) Exceptions related to military service.--
Subparagraph (A) shall not apply if the payment or
distribution is made--
''(i) during any period during which the
account holder is serving on active duty to
which called or ordered under a provision of
law referred to in section 101(a)(13)(B) of
title 10, United States Code, or
''(ii) after the account holder ceases to
be a member of a reserve component of the Armed
Forces or is transferred to the retired list of
such a reserve component.
For purposes of clause (i), a payment made during the
60-day period immediately preceding or following the
period described in clause (i) shall be treated as made
during the period so described.
''(C) Exceptions for disability or death.--
Subparagraph (A) shall not apply if the payment or
distribution is made after the account holder becomes
disabled within the meaning of section 72(m)(7) or
dies.
''(5) Investment in collectibles treated as
distributions.--Rules similar to the rules of section 408(m)
shall apply for purposes of this section.
''(e) Tax Treatment of Accounts.--
''(1) Exemption from tax.--An Armed Forces reserve savings
account is exempt from taxation under this subtitle unless such
account has ceased to be an Armed Forces reserve savings
account by reason of paragraph (2). Notwithstanding the
preceding sentence, any such account is subject to the taxes
imposed by section 511 (relating to imposition of tax on
unrelated business income of charitable, etc. organizations).
''(2) Loss of exemption of account where individual engages
in prohibited transaction.--
''(A) In general.--If the individual for whose
benefit an Armed Forces reserve savings account is
established or any individual who contributes to such
account engages in any transaction prohibited by
section 4975 with respect to the account, the account
shall cease to be an Armed Forces reserve savings
account as of the first day of the taxable year (of the
individual so engaging in such transaction) during
which such transaction occurs.
''(B) Account treated as distributing all its
assets.--In any case in which any account ceases to be
an Armed Forces reserve savings account by reason of
subparagraph (A) as of the first day of any taxable
year, paragraph (1) of subsection (d) shall apply as if
there was a distribution on such first day in an amount
equal to the fair market value (on such first day) of
all assets in the account (on such first day).
''(3) Effect of pledging account as security.--If, during
any taxable year, the individual for whose benefit an Armed
Forces reserve savings account is established uses the account
or any portion thereof as security for a loan, the portion so
used shall be treated as distributed to the individual so using
such portion.
''(f) Special Rules.--
''(1) Time when contributions deemed made.--A taxpayer
shall be deemed to have made a contribution to an Armed Forces
reserve savings account on the last day of the preceding
taxable year if the contribution is made on account of such
taxable year and is made not later than the time prescribed by
law for filing the return for such taxable year (not including
extensions thereof).
''(2) Death and divorce.--Rules similar to the rules of
sections 401(a)(9), 401(a)(11), and 408(d)(6) shall apply for
purposes of this section.
''(3) Community property laws.--This section shall be
applied without regard to any community property laws.
''(g) Reports.--The trustee of an Armed Forces reserve savings
account shall make such reports regarding such account to the Secretary
and to the account holder with respect to contributions, distributions,
and such other matters as the Secretary may require under regulations.
The reports required by this subsection shall be filed at such time and
in such manner and furnished to such individuals at such time and in
such manner as may be required by those regulations.''
(b) Allowance of Deduction in Computing Adjusted Gross Income.--
Subsection (a) of section 62 of such Code (defining adjusted gross
income) is amended by inserting after paragraph (18) the following new
paragraph:
''(19) Contributions to armed forces reserve savings
accounts.--The deduction allowed by section 223(a).''
(c) Tax on Excess Contributions.--Section 4973 of such Code
(relating to tax on excess contributions to certain tax-favored
accounts and annuities) is amended--
(1) in subsection (a), by striking ''or'' at the end of
paragraph (3), by inserting ''or'' at the end of paragraph (4),
and by inserting after paragraph (4) the following new
paragraph:
''(5) an Armed Forces reserve savings account (as defined
in section 223(c)),'', and
(2) by adding at the end the following new subsection:
''(g) Excess Contributions to an Armed Forces Reserve Savings
Account.--For purposes of this section, in the case of an Armed Forces
reserve savings account, the term 'excess contributions' means the sum
of--
''(1) the aggregate amount contributed for the taxable year
to the account which is not allowable as a deduction under
section 223 for such taxable year, and
''(2) the amount determined under this subsection for the
preceding taxable year, reduced by--
''(A) the distributions out of the accounts which
were included in gross income under section 223(d)(1)
for the taxable year, over
''(B) the amount contributed to the accounts for
the taxable year.
For purposes of this subsection, any contribution which is
distributed out of the Armed Forces reserve savings account in
a distribution to which section 223(d)(2) applies shall be
treated as an amount not contributed.''.
(d) Tax on Prohibited Transactions.--Section 4975 of such Code
(relating to prohibited transactions) is amended--
(1) by adding at the end of subsection (c) the following
new paragraph:
''(6) Special rule for armed forces reserve savings
accounts.--An individual for whose benefit an Armed Forces
reserve savings account is established and any contributor to
such account shall be exempt from the tax imposed by this
section with respect to any transaction concerning such account
(which would otherwise be taxable under this section) if, with
respect to such transaction, the account ceases to be an Armed
Forces reserve savings account by reason of the application of
section 223 to such account.'', and
(2) in subsection (e)(1), by striking ''or'' at the end of
subparagraph (E), by redesignating subparagraph (F) as
subparagraph (G), and by inserting after subparagraph (E) the
following new subparagraph:
''(F) an Armed Forces reserve savings account
described in section 223, or''.
(e) Failure To Provide Reports on Armed Forces Reserve Savings
Accounts.--Paragraph (2) of section 6693(a) of such Code (relating to
failure to provide reports on certain tax-favored accounts or
annuities) is amended by striking ''and'' at the end of subparagraph
(C), by striking the period at the end of subparagraph (D) and
inserting '', and'', and by adding at the end the following new
subparagraph:
''(E) section 223(g) (relating to Armed Forces
reserve savings accounts).''.
(f) Conforming Amendment.--The table of sections for part VII of
subchapter B of chapter 1 of such Code is amended by striking the item
relating to section 223 and inserting the following new items:

''Sec. 223. Contributions to Armed Forces
reserve savings accounts.
''Sec. 224. Cross reference.''
(g) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
Output:
Mobilized Reserve Savings Account Act - Amends the Internal Revenue Code to allow a qualified armed forces reservist to deduct annual contributions to an Armed Forces reserve savings account (as defined by this Act). Limits annual contributions to the lesser of $5,000, or $25,000 reduced by previous contributions to such accounts.Treats account distributions from deductible contributions as taxable income. Provides an additional ten percent tax unless the distribution is made: (1) while the account holder is serving on active duty (including the 60-day period immediately preceding or following such period); or (2) after the account holder ceases to be a member of a reserve component or is transferred to such component's retired list.Exempts an Armed Forces reserve savings account from taxation unless such account has ceased to be an Armed Forces reserve savings account due to a prohibited transaction by a contributor or a person for whose benefit such account was established.