,i  #aae? ,,congress  #a/ ,session  ,h4 
,r4 #abfb  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,febru>y #bh1         
#bjag,mr4 ,tib]i 7= himself & ,mr4 ,k9d7
 introduc$ ! foll[+ bill2 :i* 0 ref]r$  
to ! ,committee on ,ways & ,means  ,a   
,,bill  ,to am5d ! ,int]nal ,rev5ue     
,code ( #aihf to cl>ify ! tax treatm5t (
 c]ta9 life insurance contract          
transactions1 & = o!r purposes4  #a4    
,tax report+ = life settlem5t           
transactions  7a7 ,9 g5]al ,subp>t ,b ( 
"p ,,iii ( sub*apt] ,a ( *apt] #fa ( !  
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by add+ at ! end ! foll[+ new section3  
#fjej,x4 ,returns relat+ to c]ta9 life  
insurance contract transactions  7a7    
,requirem5t ( report+ ( c]ta9 paym5ts   
7#a7 ,9 g5]al ,e p]son :o acquires a    
life insurance contract or any int]e/ 9 
a life insurance contract 9 a reportable
 policy sale dur+ any taxable ye> %all  
make a return = su* taxable ye> 7at su* 
"t & 9 su* mann] z ! ,secret>y %all     
prescribe7 sett+ =?--  7,a7 ! "n1       

address1 & ,,t9 ( su* p]son1  7,b7 ! "n1
 address1 & ,,t9 ( ea* recipi5t ( paym5t
 9 ! reportable policy sale1  7,c7 !    
date ( su* sale1  7,d7 ! "n ( ! issu] ( 
! life insurance contract sold & !      
policy numb] ( su* contract1 &  7,e7 !  
am\nt ( ea* paym5t4  7#b7 ,/atem5t to be
 furni%$ to p]sons ) respect to :om     
in=mation is requir$ ,e p]son requir$ to
 make a return "u ?is subsection %all   
furni% to ea* p]son ^: "n is requir$ to 
be set =? 9 su* return a writt5 /atem5t 
%[+--  7,a7 ! "n1 address1 & phone numb]
 ( ! in=mation contact ( ! p]son requir$
 to make su* return1 &  7,b7 ! in=mation
 requir$ to be %[n on su* return )      
respect to su* p]son1 except t 9 ! case 
( an issu] ( a life insurance contract1 
su* /atem5t is n requir$ to include !   
in=mation specifi$ 9 p>agraph 7#a77;,e74
  7b7 ,requirem5t ( report+ ( sell]'s   
basis 9 life insurance contracts  7#a7  
,9 g5]al ,^u receipt ( ! /atem5t requir$
 "u subsection 7a77#b7 or ^u notice ( a 
transf] ( a life insurance contract to a

 =eign p]son1 ea* issu] ( a life        
insurance contract %all make a return   
7at su* "t & 9 su* mann] z ! ,secret>y  
%all prescribe7 sett+ =?-- 7,a7 ! "n1   
address1 & ,,t9 ( ! sell] :o transf]s   
any int]e/ 9 su* contract 9 su* sale1   
7,b7 ! inve/m5t 9 ! contract 7z def9$ 9 
section #gb7;e77#f77 ) respect to su*   
sell]1 &  7,c7 ! policy numb] ( su*     
contract4  7#b7 ,/atem5t to be furni%$  
to p]sons ) respect to :om in=mation is 
requir$ ,e p]son requir$ to make a      
return "u ?is subsection %all furni% to 
ea* p]son ^: "n is requir$ to be set =? 
9 su* return a writt5 /atem5t %[+-- 7,a7
 ! "n1 address1 & phone numb] ( !       
in=mation contact ( ! p]son requir$ to  
make su* return1 &  7,b7 ! in=mation    
requir$ to be %[n on su* return )       
respect to ea* sell] ^: "n is requir$ to
 be set =? 9 su* return4  7c7           
,requirem5t ( report+ ) respect to      
reportable dea? b5efits  7#a7 ,9 g5]al  
,e p]son :o makes a paym5t ( reportable 
dea? b5efits dur+ any taxable ye> %all  

make a return = su* taxable ye> 7at su* 
"t & 9 su* mann] z ! ,secret>y %all     
prescribe7 sett+ =?--  7,a7 ! "n1       
address1 & ,,t9 ( ! p]son mak+ su*      
paym5t1  7,b7 ! "n1 address1 & ,,t9 (   
ea* recipi5t ( su* paym5t1  7,c7 ! date 
( ea* su* paym5t1 &  7,d7 ! am\nt ( ea* 
su* paym5t4  7#b7 ,/atem5t to be furni%$
 to p]sons ) respect to :om in=mation is
 requir$ ,e p]son requir$ to make a     
return "u ?is subsection %all furni% to 
ea* p]son ^: "n is requir$ to be set =? 
9 su* return a writt5 /atem5t %[+-- 7,a7
 ! "n1 address1 & phone numb] ( !       
in=mation contact ( ! p]son requir$ to  
make su* return1 &  7,b7 ! in=mation    
requir$ to be %[n on su* return )       
respect to ea* recipi5t ( paym5t ^: "n  
is requir$ to be set =? 9 su* return4   
7d7 ,def9itions ,= purposes ( ?is       
section3  7#a7 ,paym5t ,! t]m paym5t    
means ! am\nt ( ca% & ! fair m>ket value
 ( any consid]ation transf]r$ 9 a       
reportable policy sale4  7#b7           
,reportable policy sale ,! t]m          

reportable policy sale has ! mean+ giv5 
su* t]m 9 section #aja7;a77#c77;,b74    
7#c7 ,issu] ,! t]m issu] means any life 
insurance company t be>s ! risk )       
respect to a life insurance contract on 
! date any return or /atem5t is requir$ 
to be made "u ?is section4  7#d7        
,reportable dea? b5efits ,! t]m         
reportable dea? b5efits means am\nts    
paid by reason ( ! dea? ( ! insur$ "u a 
life insurance contract t has be5       
transf]r$ 9 a reportable policy sale )  
respect to :i*1 a /atem5t is requir$ to 
be furni%$ "u subsection 7a77#b71 or a  
notice ( a transf] ( a life insurance   
contract to a =eign p]son has be5       
receiv$4  4  7b7 ,cl]ical am5dm5t ,!    
table ( sections = subp>t ,b ( "p ,,iii 
( sub*apt] ,a ( *apt] #fa ( ! ,int]nal  
,rev5ue ,code ( #aihf is am5d$ by ins]t+
 aft] ! item relat+ to section #fjej,w !
 foll[+ new item3  ,sec4 #fjej,x4       
,returns relat+ to c]ta9 life insurance 
contract transactions4  4  7c7 ,con=m+  
am5dm5ts  7#a7 ,section                 

#fgbd7;d77#a77;,b7 ( ! ,int]nal ,rev5ue 
,code ( #aihf is am5d$ by /rik+ or at ! 
end ( clause 7xxiv71 by add+ or at ! end
 ( clause 7xxv71 & by ins]t+ aft] clause
 7xxv7 ! foll[+ new clause3  7xxvi7     
section #fjej,x 7relat+ to returns      
relat+ to c]ta9 life insurance contract 
transactions71  4  7#b7 ,section        
#fgbd7;d77#b7 ( su* ,code is am5d$ by   
/rik+ or at ! end ( subp>agraph 7,,hh71 
by /rik+ ! p]iod at ! end ( subp>agraph 
7,,ii7 & ins]t+ 1 or1 & by ins]t+ aft]  
subp>agraph 7,,ii7 ! foll[+ new         
subp>agraph3  7,,jj7 subsection 7a77#b71
 7b77#b71 or 7c77#b7 ( section #fjej,x  
7relat+ to returns relat+ to c]ta9 life 
insurance contract transactions74  4    
7#c7 ,section #fjdg ( su* ,code is      
am5d$--  7,a7 by r$esignat+ subsection  
7g7 z subsection 7h71  7,b7 by ins]t+   
aft] subsection 7f7 ! foll[+ new        
subsection3  7g7 ,in=mation relat+ to   
life insurance contract transactions    
,?is section %all n apply to any        
in=mation :i* is requir$ to be report$  

"u section #fjej,x4  1 &  7,c7 by add+  
at ! end ( subsection 7h71 z s          
r$esignat$1 ! foll[+ new p>agraph3  7#d7
 ,= provisions requir+ report+ (        
in=mation relat+ to c]ta9 life insurance
 contract transactions1 see section     
#fjej,x4  4  7d7 ,effective date ,!     
am5dm5ts made by ?is section %all apply 
to--  7#a7 reportable policy sales aft] 
,decemb] #ca1 #bjag1 &  7#b7 reportable 
dea? b5efits paid aft] ,decemb] #ca1    
#bjag4  #b4 ,cl>ification ( tax basis ( 
life insurance contracts  7a7 ,9 g5]al  
,p>agraph 7#a7 ( section #ajaf7;a7 ( !  
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by /rik+ subp>agraph 7,a7 & all t foll[s
 & ins]t+ ! foll[+3  7,a7 =--  7i7 taxes
 or o!r c>ry+ *>ges describ$ 9 section  
#bff1 or  7ii7 exp5ditures describ$ 9   
section #agc 7relat+ to circulation     
exp5ditures71  = :i* d$uctions h be5    
tak5 by ! taxpay] 9 det]m9+ taxable     
income = ! taxable ye> or prior taxable 
ye>s1 or  7,b7 = mortality1 exp5se1 or  
o!r reasonable *>ges incurr$ "u an      

annuity or life insurance contract4  4  
7b7 ,effective date ,! am5dm5t made by  
?is section %all apply to transactions  
ent]$ into aft] ,augu/ #be1 #bjji4  #c4 
,exception to transf] = valuable        
consid]ation rules  7a7 ,9 g5]al        
,subsection 7a7 ( section #aja ( !      
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by add+ at ! end ! foll[+ new p>agraph3 
7#c7 ,exception to valuable consid]ation
 rules = comm]cial transf]s  7,a7 ,9    
g5]al ,! second s5t5ce ( p>agraph 7#b7  
%all n apply 9 ! case ( a transf] ( a   
life insurance contract1 or any int]e/  
!re91 :i* is a reportable policy sale4  
7,b7 ,reportable policy sale  7i7 ,9    
g5]al ,= purposes ( ?is p>agraph1 ! t]m 
reportable policy sale means !          
acquisition ( an int]e/ 9 a life        
insurance contract1 directly or         
indirectly1 if ! acquir] has no         
sub/antial family1 bus9ess1 or f9ancial 
relation%ip ) ! insur$ ap>t f !         
acquir]'s int]e/ 9 su* life insurance   
contract4  7ii7 ,indirect acquisitions  

,= purposes ( clause 7i71 ! t]m         
indirectly applies to ! acquisition ( an
 int]e/ 9 a p>tn]%ip1 tru/1 or o!r      
entity t holds an int]e/ 9 ! life       
insurance contract unless--  7,i7 !     
insur$ ( ! life insurance contract is an
 exi/+ or =m] employee1 (fic]1 director1
 #e-p]c5t own]1 or indep5d5t contractor 
( ! acquir$ entity or its subsidi>ies or
 pr$ecessors1 &  7,,ii7 no m ?an #ej    
p]c5t ( ! gross value ( ! assets ( !    
acquir$ entity consi/s ( life insurance 
contracts or ! p>ties demon/rate to !   
satisfaction ( ! ,secret>y t !          
acquisition ( ! life insurance is n !   
pr9cipal purpose ( ! acquir$ entity4    
7iii7 ,det]m9ation ( gross value (      
assets ,= purposes ( clause 7ii71 ! t]m 
gross value ( assets means1 ) respect to
 any acquir$ entity1 ! sum (-- 7,i7 9 ! 
case ( assets ( ! acquir$ entity :i* are
 life insurance policies or annuity or  
end[m5t contracts1 ! unborr[$ policy ca%
 values ( su* policies & contracts1 &   
7,,ii7 9 ! case ( assets ( ! acquir$    

entity n describ$ 9 subclause 7,i71 !   
adju/$ bases 7)9 ! mean+ ( section      
#ajaf7 ( su* assets4  4  7b7 ,con=m+    
am5dm5t ,p>agraph 7#a7 ( section        
#aja7;a7 ( ! ,int]nal ,rev5ue ,code (   
#aihf is am5d$ by /rik+ p>agraph 7#b7 & 
ins]t+ p>agraphs 7#b7 & 7#c74  7c7      
,effective date ,! am5dm5ts made by ?is 
section %all apply to transf]s aft]     
,decemb] #ca1 #bjag4