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.

I 117TH CONGRESS 1ST SESSION H. R. 2909 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. IN THE HOUSE OF REPRESENTATIVES APRIL 30, 2021 Mr. BEYER (for himself and Mr. KELLY of Pennsylvania) introduced the following bill; which was referred to the Committee on Ways and Means A BILL 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 Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. ONE-TIME ELECTION FOR QUALIFIED CHARI- 3 TABLE DISTRIBUTION TO SPLIT-INTEREST 4 ENTITY; INCREASE IN QUALIFIED CHARI- 5 TABLE DISTRIBUTION LIMITATION. 6 (a) ONE-TIME ELECTION FOR QUALIFIED CHARI- 7 TABLE DISTRIBUTION TO SPLIT-INTEREST ENTITY.— 8 VerDate Sep 11 2014 04:42 Jun 18, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2909.IH H2909 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 2909 IH Section 408(d)(8) of such Code is amended by adding at 1 the end the following new subparagraph: 2 ‘‘(F) ONE-TIME ELECTION FOR QUALIFIED 3 CHARITABLE DISTRIBUTION TO SPLIT-INTEREST 4 ENTITY.— 5 ‘‘(i) IN GENERAL.—A taxpayer may 6 for a taxable year elect under this subpara- 7 graph to treat as meeting the requirement 8 of subparagraph (B)(i) any distribution 9 from an individual retirement account 10 which is made directly by the trustee to a 11 split-interest entity, but only if— 12 ‘‘(I) an election is not in effect 13 under this subparagraph for a pre- 14 ceding taxable year, 15 ‘‘(II) the aggregate amount of 16 distributions of the taxpayer with re- 17 spect to which an election under this 18 subparagraph does not exceed 19 $50,000, and 20 ‘‘(III) such distribution meets the 21 requirements of clauses (iii) and (iv). 22 ‘‘(ii) SPLIT-INTEREST ENTITY.—For 23 purposes of this subparagraph, the term 24 ‘split-interest entity’ means— 25 VerDate Sep 11 2014 04:42 Jun 18, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2909.IH H2909 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 2909 IH ‘‘(I) a charitable remainder annu- 1 ity trust (as defined in section 2 664(d)(1)), but only if such trust is 3 funded exclusively by qualified chari- 4 table distributions, 5 ‘‘(II) a charitable remainder 6 unitrust (as defined in section 7 664(d)(2)), but only if such unitrust 8 is funded exclusively by qualified char- 9 itable distributions, or 10 ‘‘(III) a charitable gift annuity 11 (as defined in section 501(m)(5)), but 12 only if such annuity is funded exclu- 13 sively by qualified charitable distribu- 14 tions and commences fixed payments 15 of 5 percent or greater not later than 16 1 year from the date of funding. 17 ‘‘(iii) CONTRIBUTIONS MUST BE OTH- 18 ERWISE DEDUCTIBLE.—A distribution 19 meets the requirement of this clause only 20 if— 21 ‘‘(I) in the case of a distribution 22 to a charitable remainder annuity 23 trust or a charitable remainder uni- 24 trust, a deduction for the entire value 25 VerDate Sep 11 2014 04:42 Jun 18, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2909.IH H2909 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 2909 IH of the remainder interest in the dis- 1 tribution for the benefit of a specified 2 charitable organization would be al- 3 lowable under section 170 (determined 4 without regard to subsection (b) 5 thereof and this paragraph), and 6 ‘‘(II) in the case of a charitable 7 gift annuity, a deduction in an 8 amount equal to the amount of the 9 distribution reduced by the value of 10 the annuity described in section 11 501(m)(5)(B) would be allowable 12 under section 170 (determined with- 13 out regard to subsection (b) thereof 14 and this paragraph). 15 ‘‘(iv) LIMITATION ON INCOME INTER- 16 ESTS.—A distribution meets the require- 17 ments of this clause only if— 18 ‘‘(I) no person holds an income 19 interest in the split-interest entity 20 other than the individual for whose 21 benefit such account is maintained, 22 the spouse of such individual, or both, 23 and 24 VerDate Sep 11 2014 04:42 Jun 18, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2909.IH H2909 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 2909 IH ‘‘(II) the income interest in the 1 split-interest entity is nonassignable. 2 ‘‘(v) SPECIAL RULES.— 3 ‘‘(I) CHARITABLE REMAINDER 4 TRUSTS.—Notwithstanding section 5 664(b), distributions made from a 6 trust described in subclause (I) or (II) 7 of clause (ii) shall be treated as ordi- 8 nary income in the hands of the bene- 9 ficiary to whom the annuity described 10 in section 664(d)(1)(A) or the pay- 11 ment described in section 12 664(d)(2)(A) is paid. 13 ‘‘(II) CHARITABLE GIFT ANNU- 14 ITIES.—Qualified charitable distribu- 15 tions made to fund a charitable gift 16 annuity shall not be treated as an in- 17 vestment in the contract for purposes 18 of section 72(c).’’. 19 (b) INFLATION ADJUSTMENT.—Section 408(d)(8) of 20 such Code, as amended by subsection (a), is amended by 21 adding at the end the following new subparagraph: 22 ‘‘(G) INFLATION ADJUSTMENT.— 23 ‘‘(i) IN GENERAL.—In the case of any 24 taxable year beginning after 2022, each of 25 VerDate Sep 11 2014 04:42 Jun 18, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2909.IH H2909 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 2909 IH the dollar amounts in subparagraphs (A) 1 and (F) shall be increased by an amount 2 equal to— 3 ‘‘(I) such dollar amount, multi- 4 plied by 5 ‘‘(II) the cost-of-living adjust- 6 ment determined under section 1(f)(3) 7 for the calendar year in which the tax- 8 able year begins, determined by sub- 9 stituting ‘calendar year 2021’ for ‘cal- 10 endar year 2016’ in subparagraph 11 (A)(ii) thereof. 12 ‘‘(ii) ROUNDING.—If any dollar 13 amount increased under clause (i) is not a 14 multiple of $1,000, such dollar amount 15 shall be rounded to the nearest multiple of 16 $1,000.’’. 17 (c) EFFECTIVE DATE.—The amendment made by 18 this section shall apply to distributions made in taxable 19 years ending after the date of the enactment of this Act. 20 Æ VerDate Sep 11 2014 04:42 Jun 18, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H2909.IH H2909 pbinns on DSKJLVW7X2PROD with BILLS