,i #aae? ,,congress #b;d ,session ,h4 ,r4 #gbjc ,,9 ,,! ,,h\se ,,( ,,repres5tatives ,novemb] #cj1 #bjah,mr4 ,m>*ant 7= himself & ,mr4 ,higg9s ( ,new ,york7 introduc$ ! foll[+ bill2 :i* 0 ref]r$ to ! ,committee on ,ways & ,means ,a ,,bill ,to am5d ! ,int]nal ,rev5ue ,code ( #aihf to create long-t]m c>e acc\nts fund$ by ! proce$s ( ! sale or assignm5t ( life insurance contracts4 #a4 ,%ort title ,?is ,act may be cit$ z ! ,long-,t]m ,c>e ,acc\nt ,act4 #b4 ,long-t]m c>e acc\nt 7a7 ,9 g5]al ,"p ,,iii ( sub*apt] ,b ( *apt] #a ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by ins]t+ aft] section #aci;,g ! foll[+ new section3 #aci;,h4 ,long-t]m c>e acc\nt 7a7 ,exclusion ( contributions ( long-,t]m ga9 f sales ( life insurance contracts ,! am\nt ( ga9 f ! sale or assignm5t ( a life insurance contract ( a taxpay] %all be r$uc$ 7b n bel[ z]o7 by ! am\nt ( contributions to a long-t]m c>e acc\nt made by su* taxpay] dur+ ! #cj-;day p]iod beg9n+ on ! date ( su* sale or assignm5t4 7b7 ,tax treatm5t ( long-,t]m c>e acc\nt 7#a7 ,9 g5]al ,a long-t]m acc\nt is exempt f taxation "u ?is subtitle unless su* acc\nt has ceas$ to be a long-t]m c>e acc\nt4 ,not)/&+ ! prec$+ s5t5ce1 any su* acc\nt is subject to ! taxes impos$ by section #eaa 7relat+ to imposition ( tax on unrelat$ bus9ess income ( *>itable1 etc4 organizations74 7#b7 ,acc\nt t]m9ations ,rules simil> to ! rules ( p>agraphs 7#b7 & 7#d7 ( section #djh7;e7 %all apply to heal? sav+s acc\nts1 & any am\nt treat$ z di/ribut$ "u su* rules %all be treat$ z n us$ to pay long-t]m c>e exp5ses4 7#c7 ,tax treatm5t ( di/ributions 7,a7 ,am\nts us$ = long-t]m c>e exp5ses ,any am\nt paid or di/ribut$ out ( a long-t]m c>e acc\nt :i* is us$ exclusively to pay long-t]m c>e exp5ses ( ! acc\nt b5efici>y or ! acc\nt b5efici>y's sp\se %all n be includible 9 gross income4 7,b7 ,inclusion ( am\nts n us$ = long-t]m c>e exp5ses ,any am\nt paid or di/ribut$ out ( a long-t]m c>e acc\nt :i* is n us$ to pay ! long-t]m c>e exp5ses ( ! acc\nt b5efici>y or ! acc\nt b5efici>y's sp\se %all be includ$ 9 ! gross income ( su* b5efici>y4 7,c7 ,additional tax on di/ributions n us$ = long-t]m c>e exp5ses ,! tax impos$ by ?is *apt] on ! acc\nt b5efici>y = any taxable ye> 9 :i* !re is a paym5t or di/ribution f a long-t]m c>e acc\nt ( su* b5efici>y :i* is includible 9 gross income "u subp>agraph 7,b7 %all be increas$ by #bj p]c5t ( ! am\nt :i* is s includible4 ,?is subp>agraph %all n apply if ! paym5t or di/ribution is made aft] ! acc\nt b5efici>y-- 7i7 dies1 7ii7 becomes a t]m9ally ill individual 7z su* t]m is def9$ 9 section #aja7;g77#d77;,a771 or 7iii7 becomes a *ronically ill individual 7z su* t]m is def9$ 9 section #aja7;g77#d77;,b774 7#d7 ,coord9ation ) m$ical exp5se d$uction ,= purposes ( det]m9+ ! am\nt ( ! d$uction "u section #bac1 any paym5t or di/ribution out ( a long-t]m c>e acc\nt = long-t]m c>e exp5ses %all n be treat$ z an exp5se paid = m$ical c>e4 7#e7 ,transf] ( acc\nt incid5t to divorce ,! transf] ( an individual's int]e/ 9 a long-t]m c>e acc\nt to an individual's sp\se or =m] sp\se "u a divorce or sep>ation in/rum5t describ$ 9 subp>agraph 7,a7 ( section #ga7;b77#b7 %all n be consid]$ a taxable transf] made by su* individual not)/&+ any o!r provision ( ?is subtitle1 & su* int]e/ %all1 aft] su* transf]1 be treat$ z a long-t]m c>e acc\nt ) respect to :i* su* sp\se is ! acc\nt b5efici>y4 7#f7 ,treatm5t aft] dea? ( acc\nt b5efici>y 7,a7 ,treatm5t if designat$ b5efici>y is sp\se ,if ! acc\nt b5efici>y's surviv+ sp\se acquires su* b5efici>y's int]e/ 9 a long-t]m c>e acc\nt by reason ( be+ ! designat$ b5efici>y ( su* acc\nt at ! dea? ( ! acc\nt b5efici>y1 su* long-t]m c>e acc\nt %all be treat$ z if ! sp\se 7 ! acc\nt b5efici>y4 7,b7 ,o!r cases 7i7 ,9 g5]al ,if1 by reason ( ! dea? ( ! acc\nt b5efici>y1 any p]son acquires ! acc\nt b5efici>y's int]e/ 9 a long-t]m c>e acc\nt 9 a case to :i* subp>agraph 7,a7 does n apply-- 7,i7 su* acc\nt %all cease to be a long-t]m c>e acc\nt z ( ! date ( dea?1 & 7,,ii7 an am\nt equal to ! fair m>ket value ( ! assets 9 su* acc\nt on su* date %all be includible if su* p]son is n ! e/ate ( su* b5efici>y1 9 su* p]son's gross income = ! taxable ye> :i* includes su* date1 or if su* p]son is ! e/ate ( su* b5efici>y1 9 su* b5efici>y's gross income = ! la/ taxable ye> ( su* b5efici>y4 7ii7 ,special rules 7,i7 ,r$uction ( inclusion = pr$ea? exp5ses ,! am\nt includible 9 gross income "u clause 7i7 by any p]son 7o!r ?an ! e/ate7 %all be r$uc$ by ! am\nt ( qualifi$ long-t]m c>e exp5ses :i* 7 incurr$ by ! dec$5t be=e ! date ( ! dec$5t's dea? & paid by su* p]son )9 #a ye> aft] su* date4 7,,ii7 ,d$uction = e/ate taxes ,an appropriate d$uction %all be all[$ "u section #fia7;c7 to any p]son 7o!r ?an ! dec$5t or ! dec$5t's sp\se7 ) respect to am\nts includ$ 9 gross income "u clause 7i7 by su* p]son4 7c7 ,def9itions ,= purposes ( ?is subsection-- 7#a7 ,acc\nt b5efici>y ,! t]m acc\nt b5efici>y means1 ) respect to a long-t]m c>e acc\nt1 ! individual on ^: behalf su* acc\nt 0 e/abli%$4 7#b7 ,long-t]m c>e acc\nt ,! t]m long-t]m c>e acc\nt means a tru/ creat$ or organiz$ 9 ! ,unit$ ,/ates z a long-t]m c>e acc\nt1 b only if ! writt5 gov]n+ in/rum5t creat+ ! tru/ meets ! foll[+ requirem5ts3 7,a7 ,no contribution w be accept$ unless x is 9 ca% & 9 consid]ation ( ! sale or assignm5t ( any portion ( ! dea? b5efits "u a life insurance contract on ! life ( ! acc\nt b5efici>y4 7,b7 ,! tru/ee is a bank 7z def9$ 9 section #djh7n771 an insurance company 7z def9$ 9 section #haf71 or ano!r p]son :o demon/rates to ! satisfaction ( ! ,secret>y t ! mann] 9 :i* su* p]son w adm9i/] ! tru/ w be consi/5t ) ! requirem5ts ( ?is section4 7,c7 ,no "p ( ! tru/ assets w be inve/$ 9 life insurance contracts4 7,d7 ,! assets ( ! tru/ w n be comm+l$ ) o!r prop]ty except 9 a common tru/ fund or common inve/m5t fund4 7,e7 ,! int]e/ ( an individual 9 ! balance 9 8 acc\nt is non=feitable4 7#c7 ,long-t]m c>e exp5ses ,! t]m long-t]m c>e exp5ses means am\nts paid or incurr$-- 7,a7 z premiums = a qualifi$ long-t]m c>e insurance contract 7z su* t]m is def9$ 9 section #ggjb;,b7b771 7,b7 = qualifi$ long-t]m c>e s]vices 7z su* t]m is def9$ 9 section #ggjb;,b7c771 or 7,c7 = qualifi$ heal? s]vices4 7#d7 ,qualifi$ heal? s]vices ,! t]m qualifi$ heal? s]vices means-- 7,a7 diagno/ic1 prev5tive1 !rapeutic1 cur+1 treat+1 mitigat+1 & rehabilitative s]vices1 & ma9t5ance or p]sonal c>e s]vices1 :i* are-- 7i7 requir$ by an in/rum5tally impair$ individual1 & 7ii7 provid$ pursuant to a plan ( c>e prescrib$ by a lic5s$ heal? c>e practition]1 or 7,b7 items or s]vices t a lic5s$ heal? c>e practition] det]m9es are reasonable & necess>y to r$uce ! likelihood ( an individual becom+ an in/rum5tally impair$ individual4 7#e7 ,in/rum5tally impair$ individual ,! t]m in/rum5tally impair$ individual means an individual :o has be5 c]tifi$ by a lic5s$ heal? c>e practition] z be+ unable to p]=m 7)\t sub/antial assi/ance f ano!r individual7 at lea/ #b in/rum5tal activities ( daily liv+ = a p]iod ( at lea/ #ij days due to a loss ( functional capacity4 7#f7 ,in/rum5tal activities ( daily liv+ ,! t]m in/rum5tal activities ( daily liv+ means activities relat$ to liv+ indep5d5tly 9 ! community1 includ+-- 7,a7 meal plann+ & prep>ation1 7,b7 manag+ f9ances1 7,c7 %opp+ = food1 clo?+1 & o!r ess5tial items1 7,d7 p]=m+ ess5tial h\sehold *ores1 7,e7 communicat+ by phone or o!r m$ia1 or 7,f7 travel+ 9 & p>ticipat+ 9 ! community4 4 7b7 ,cl]ical am5dm5t ,! table ( sections = "p ,,iii ( sub*apt] ,b ( *apt] #a ( su* ,code is am5d$ by ins]t+ aft] ! item relat+ to section #aci;,g ! foll[+ new item3 ,sec4 #aci;,g4 ,long-t]m c>e acc\nt4 4 7c7 ,effective date ,! am5dm5ts made by ?is subsection %all apply ) respect to sales or assignm5ts ( life insurance contracts aft] ! date ( enactm5t ( ?is ,act4 7d7 ,reports ,! ,secret>y may require ! tru/ee ( a long-t]m c>e acc\nt to make su* reports reg>d+ su* acc\nt to ! ,secret>y & to ! acc\nt b5efici>y ) respect to contributions1 di/ributions1 & su* o!r matt]s z ! ,secret>y det]m9es appropriate4