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SEC. 103. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT ACCOUNTS FOR CHARITABLE PURPOSES.
(a) IN GENERAL- Subsection (d) of section 408 (relating to individual retirement accounts) is amended by adding at the end the following new paragraph:
(8) DISTRIBUTIONS FOR CHARITABLE PURPOSES-
(A) IN GENERAL- In the case of a qualified charitable distribution from an individual retirement account to an organization described in section 170(c), no amount shall be includible in the gross income of the account holder or beneficiary.
(B) SPECIAL RULES RELATING TO CHARITABLE REMAINDER TRUSTS, POOLED INCOME FUNDS, AND CHARITABLE GIFT ANNUITIES-
`(i) IN GENERAL- In the case of a qualified charitable distribution from an individual retirement account--
`(I) to a charitable remainder annuity trust or a charitable remainder unitrust (as such terms are defined in section 664(d)),
`(II) to a pooled income fund (as defined in section 642(c)(5)), or
`(III) for the issuance of a charitable gift annuity (as defined in section 501(m)(5)),
no amount shall be includible in gross income of the account holder or beneficiary. The preceding sentence shall apply only if no person holds any interest in the amounts in the trust, fund, or annuity attributable to such distribution other than one or more of the following: the individual for whose benefit such account is maintained, the spouse of such individual, or any organization described in section 170(c).
`(ii) DETERMINATION OF INCLUSION OF AMOUNTS DISTRIBUTED- In determining the amount includible in the gross income of the distributee of a distribution from a trust described in clause (i)(I) or an annuity (as described in clause (i)(III)), the portion of any qualified charitable distribution to such trust or for such annuity which would (but for this subparagraph) have been includible in gross income--
`(I) in the case of any such trust, shall be treated as income described in section 664(b)(1), or
`(II) in the case of any such annuity, shall not be treated as an investment in the contract.
`(iii) NO INCLUSION FOR DISTRIBUTION TO POOLED INCOME FUND- No amount shall be includible in the gross income of a pooled income fund (as so defined) by reason of a qualified charitable distribution to such fund.
(C) QUALIFIED CHARITABLE DISTRIBUTION- For purposes of this paragraph, the term `qualified charitable distribution' means any distribution from an individual retirement account--
`(i) which is made on or after the date that the individual for whose benefit the account is maintained has attained age 70 1/2 , and
`(ii) which is a charitable contribution (as defined in section 170(c)) made directly from the account to--
`(I) an organization described in section 170(c), or
`(II) a trust, fund, or annuity described in subparagraph (B).
(D) DENIAL OF DEDUCTION- The amount allowable as a deduction to the taxpayer for the taxable year under section 170 for qualified charitable distributions shall be reduced (but not below zero) by the sum of the amounts of the qualified charitable distributions during such year which (but for this paragraph) would have been includible in the gross income of the taxpayer for such year.'.
(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2000.
(a) IN GENERAL- Subsection (d) of section 408 (relating to individual retirement accounts) is amended by adding at the end the following new paragraph:
(8) DISTRIBUTIONS FOR CHARITABLE PURPOSES-
(A) IN GENERAL- In the case of a qualified charitable distribution from an individual retirement account to an organization described in section 170(c), no amount shall be includible in the gross income of the account holder or beneficiary.
(B) SPECIAL RULES RELATING TO CHARITABLE REMAINDER TRUSTS, POOLED INCOME FUNDS, AND CHARITABLE GIFT ANNUITIES-
`(i) IN GENERAL- In the case of a qualified charitable distribution from an individual retirement account--
`(I) to a charitable remainder annuity trust or a charitable remainder unitrust (as such terms are defined in section 664(d)),
`(II) to a pooled income fund (as defined in section 642(c)(5)), or
`(III) for the issuance of a charitable gift annuity (as defined in section 501(m)(5)),
no amount shall be includible in gross income of the account holder or beneficiary. The preceding sentence shall apply only if no person holds any interest in the amounts in the trust, fund, or annuity attributable to such distribution other than one or more of the following: the individual for whose benefit such account is maintained, the spouse of such individual, or any organization described in section 170(c).
`(ii) DETERMINATION OF INCLUSION OF AMOUNTS DISTRIBUTED- In determining the amount includible in the gross income of the distributee of a distribution from a trust described in clause (i)(I) or an annuity (as described in clause (i)(III)), the portion of any qualified charitable distribution to such trust or for such annuity which would (but for this subparagraph) have been includible in gross income--
`(I) in the case of any such trust, shall be treated as income described in section 664(b)(1), or
`(II) in the case of any such annuity, shall not be treated as an investment in the contract.
`(iii) NO INCLUSION FOR DISTRIBUTION TO POOLED INCOME FUND- No amount shall be includible in the gross income of a pooled income fund (as so defined) by reason of a qualified charitable distribution to such fund.
(C) QUALIFIED CHARITABLE DISTRIBUTION- For purposes of this paragraph, the term `qualified charitable distribution' means any distribution from an individual retirement account--
`(i) which is made on or after the date that the individual for whose benefit the account is maintained has attained age 70 1/2 , and
`(ii) which is a charitable contribution (as defined in section 170(c)) made directly from the account to--
`(I) an organization described in section 170(c), or
`(II) a trust, fund, or annuity described in subparagraph (B).
(D) DENIAL OF DEDUCTION- The amount allowable as a deduction to the taxpayer for the taxable year under section 170 for qualified charitable distributions shall be reduced (but not below zero) by the sum of the amounts of the qualified charitable distributions during such year which (but for this paragraph) would have been includible in the gross income of the taxpayer for such year.'.
(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2000.
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Kenneth L. Musgrave, et ux.v. Commissioner, T.C. Memo. 2000-285; No. 11209-98 (September 6, 2000)
Estate of Kenneth E. Starkey v. United States; 86 AFTR2d Par. 2000-5161; No. 99-2357
Stanbury Law Firm, P.A. vs. IRS; 86 AFTR2d Par. 2000-5144; No. 99-3138 (August 9, 2000)
United States v. Indianapolis Baptist Temple; 86 AFTR2d Par. 2000-5149; No. 00-1102