Persons With Disabilities Trusts Tax Rate Restoration Act

Persons With Disabilities Trusts Tax Rate Restoration Act - Amends the Internal Revenue Code to establish a special tax rate on trusts established exclusively for the care of mentally ill or disabled beneficiaries.

[Congressional Bills 105th Congress]
[From the U.S. Government Printing Office]
[H.R. 2335 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 2335

 To amend the Internal Revenue Code of 1986 to repeal the 1993 Federal 
  income tax rate increases on trusts established for the benefit of 
                     individuals with disabilities.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 31, 1997

 Mr. Goode (for himself, Mr. Goodlatte, Mr. Boucher, Mr. Pickett, and 
    Mr. Davis of Virginia) 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 repeal the 1993 Federal 
  income tax rate increases on trusts established for the benefit of 
                     individuals with disabilities.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Persons With Disabilities Trusts Tax 
Rate Restoration Act''.

SEC. 2. REPEAL OF 1993 RATE INCREASES ON TRUSTS FOR INDIVIDUALS WHO ARE 
              DISABLED OR FOR COLLEGE EDUCATIONS.

    (a) In General.--Section 1(e) of the Internal Revenue Code of 1986 
(relating to tax imposed on estates and trusts) is amended to read as 
follows:
    ``(e) Estates and Trusts.--
            ``(1) In general.--Except as provided in paragraph (2), 
        there is hereby imposed on the taxable income of--
                    ``(A) every estate, and
                    ``(B) every trust,
        taxable under this subsection a tax determined in accordance 
        with the following table:

``If taxable income is:             The tax is:
    Not over $1,500................
                                        15% of taxable income.
    Over $1,500 but not over $3,500
                                        $225, plus 28% of the excess 
                                                over $1,500.
    Over $3,500 but not over $5,500
                                        $785, plus 31% of the excess 
                                                over $3,500.
    Over $5,500 but not over $7,500
                                        $1,405, plus 36% of the excess 
                                                over $5,500.
    Over $7,500....................
                                        $2,125, plus 39.6% of the 
                                                excess over $7,500.
            ``(2) Special rule for certain trusts.--
                    ``(A) In general.--There is hereby imposed on the 
                taxable income of an eligible trust taxable under this 
                subsection a tax determined in accordance with the 
                following table:

``If taxable income is:             The tax is:
    Not over $3,300................
                                        15% of taxable income.
    Over $3,300 but not over $9,900
                                        $495, plus 28% of the excess 
                                                over $3,300.
    Over $9,900....................
                                        $2,343, plus 31% of the excess 
                                                over $9,900.
                    ``(B) Eligible trust.--For purposes of subparagraph 
                (A), the term `eligible trust' means a trust which is 
                established exclusively for the purpose of providing 
                reasonable amounts for the support and maintenance of 1 
                or more beneficiaries each of whom is an individual who 
                is mentally ill or has a disability (within the meaning 
                of section 3(2) of the Americans With Disabilities Act 
                of 1990 (42 U.S.C. 12102(2)) at the time the trust is 
                established. A trust shall not fail to meet the 
                requirements of this subparagraph merely because the 
                corpus of the trust may revert to the grantor or a 
                member of the grantor's family upon the death of the 
                beneficiary.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.
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