IN THE SENATE OF THE UNITED STATES
March 10, 2011
Mr. Schumer (for himself, Ms. Snowe, Mr. Burr, Mr. Kerry, Mr. Brown of Ohio, Mr. Levin, Mr. Johnson of South Dakota, Mr. Pryor, Mr. Leahy, and Mrs. Gillibrand) introduced the following bill; which was read twice and referred to the Committee on Finance
To amend the Internal Revenue Code of 1986 to expand tax-free distributions from individual retirement accounts for charitable purposes.
This Act may be cited as the
Public Good IRA Rollover Act of
Tax-free distributions from individual retirement accounts for charitable purposes
Paragraph (8) of section 408(d) of the Internal Revenue Code of 1986 (relating to tax treatment of distributions) is amended to read as follows:
Distributions for charitable purposes
No amount shall be includible in gross income by reason of a qualified charitable distribution.
Qualified charitable distribution
For purposes of this paragraph, the term qualified charitable distribution means any distribution from an individual retirement account—
which is made directly by the trustee—
to an organization described in section 170(c), or
to a split-interest entity, and
which is made on or after the date that the individual for whose benefit the account is maintained has attained—
in the case of any distribution described in clause (i)(I), age 701/2, and
in the case of any distribution described in clause (i)(II), age 591/2.
Contributions must be otherwise deductible
For purposes of this paragraph—
A distribution to an organization described in section 170(c) shall be treated as a qualified charitable distribution only if a deduction for the entire distribution would be allowable under section 170 (determined without regard to subsection (b) thereof and this paragraph).
A distribution to a split-interest entity shall be treated as a qualified charitable distribution only if a deduction for the entire value of the interest in the distribution for the use of an organization described in section 170(c) would be allowable under section 170 (determined without regard to subsection (b) thereof and this paragraph).
Application of Section 72
Notwithstanding section 72, in determining the extent to which a distribution is a qualified charitable distribution, the entire amount of the distribution shall be treated as includible in gross income without regard to subparagraph (A) to the extent that such amount does not exceed the aggregate amount which would have been so includible if all amounts in all individual retirement plans of the individual were distributed during the taxable year and all such plans were treated as 1 contract for purposes of determining under section 72 the aggregate amount which would have been so includible. Proper adjustments shall be made in applying section 72 to other distributions in such taxable year and subsequent taxable years.
Special rules for split-interest entities
Charitable remainder trusts
Notwithstanding section 664(b), distributions made from a trust described in subparagraph (G)(i) shall be treated as ordinary income in the hands of the beneficiary to whom is paid the annuity described in section 664(d)(1)(A) or the payment described in section 664(d)(2)(A).
Pooled income funds
No amount shall be includible in the gross income of a pooled income fund (as defined in subparagraph (G)(ii)) by reason of a qualified charitable distribution to such fund, and all distributions from the fund which are attributable to qualified charitable distributions shall be treated as ordinary income to the beneficiary.
Charitable gift annuities
Qualified charitable distributions made for a charitable gift annuity shall not be treated as an investment in the contract.
Denial of deduction
Qualified charitable distributions shall not be taken into account in determining the deduction under section 170.
Split-interest entity defined
For purposes of this paragraph, the term split-interest entity means—
a charitable remainder annuity trust or a charitable remainder unitrust (as such terms are defined in section 664(d)) which must be funded exclusively by qualified charitable distributions,
a pooled income fund (as defined in section 642(c)(5)), but only if the fund accounts separately for amounts attributable to qualified charitable distributions, and
a charitable gift annuity (as defined in section 501(m)(5)).
The amendment made by this section shall apply to distributions made in taxable years beginning after December 31, 2010.