,,ii #aaith ,,congress #b;d ,session ,s4 #djbf ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,march #i1 #bjbf,mr4 ,scott of ,florida introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to create ,american dream accounts4 #a4 ,short title ,this ,act may be cited as the ,american ,dream ,accounts ,act of #bjbf4 #b4 ,american dream accounts 7a7 ,in general ,subchapter ,f of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new part3 ,x ,american dream accounts ,sec4 #ecj;,b4 ,american dream accounts4 #ecj;,b4 ,american dream accounts 7a7 ,general rule ,an ,american dream account shall be exempt from taxation under this subtitle4 ,notwithstanding the preceding sentence1 such account shall be subject to the taxes imposed by section #eaa 7relating to imposition of tax on unrelated business income of charitable organizations74 7b7 ,american dream account ,for purposes of this section-- 7#a7 ,in general ,the term ,american dream account means a trust created or organized in the ,united ,states for the exclusive benefit of an eligible individual and which is designated 7in such manner as the ,secretary shall prescribe7 at the time of the establishment of the trust as an ,american dream account1 but only if the written governing instrument creating the trust meets the following requirements3 7,a7 ,no contribution will be accepted-- 7i7 unless it is in cash1 7ii7 after the date the beneficiary makes a qualified first-time homebuyer distribution or a rollover distribution described in clause 7ii7 or 7iii7 of subsection 7d77#e77;,a71 and 7iii7 except in the case of a rollover contribution1 if such contribution would result in aggregate contributions to all ,american dream accounts of the beneficiary for the calendar year in excess of the amount determined under subsection 7c74 7,b7 ,the trustee is a bank 7as defined in section #djh7n77 or another person who demonstrates to the satisfaction of the ,secretary that the manner in which that person will administer the trust will be consistent with the requirements of this section or who has so demonstrated with respect to any individual retirement plan4 7,c7 ,no part of the trust funds will be invested in life insurance contracts4 7,d7 ,the assets of the trust shall not be commingled with other property except in a common trust fund or common investment fund4 7,e7 ,the interest of an individual in the balance of his account is nonforfeitable4 7,f7 ,the trustee requires the beneficiary to annually attest1 to the best of their knowledge1 to any contributions made to any other ,american dream account established for the benefit of the same beneficiary4 7#b7 ,eligible individual ,the term eligible individual means any individual who is a citizen of the ,united ,states4 7c7 ,contribution limitation 7#a7 ,in general ,the amount determined under this subsection is the lesser of-- 7,a7 #g1ejj1 or 7,b7 #bej1jjj1 reduced by the aggregate amount of contributions made to all ,american dream accounts of the beneficiary for such taxable year and all prior taxable years4 7#b7 ,catchup contributions ,in the case of an ,american dream account the beneficiary of which has attained the age of #ce before the close of the calendar year1 paragraph 7#a77;,a7 shall be applied by substituting #aj1jjj for #g1ejj4 7#c7 ,treatment of rollover contributions ,for purposes of this subsection-- 7,a7 any rollover contribution described in subsection 7d77#e7 shall not be taken into account for purposes of determining the amount of contribution under paragraph 7#a77;,a71 and 7,b7 a rollover contribution described in subsection 7d77#e77;,a77i7 shall not be taken into account for purposes of determining the amount under paragraph 7#a77;,b74 7d7 ,tax treatment of distributions 7#a7 ,in general ,except as provided in paragraph 7#b71 any distribution shall be includible in the gross income of the distributee in the manner provided in section #gb4 7#b7 ,qualified first-time homebuyer distributions 7,a7 ,in general ,except as provided in subparagraph 7,b71 any amount paid or distributed out of an ,american dream account which is a qualified first-time homebuyer distribution shall not be includible in gross income4 7,b7 ,qualified first-time homebuyer distribution ,for purposes of this section1 the term qualified first-time homebuyer distribution has the meaning given such term under section #gb7t77#h71 determined without regard to subparagraph 7,b7 thereof and by substituting #c-year period for #b-year period in subparagraph 7,d77i77,i7 thereof4 7,c7 ,limitations 7i7 ,dollar limitation 7,i7 ,in general ,the amount treated as a qualified first-time homebuyer distribution under subparagraph 7,a7 shall not exceed #ejj1jjj4 7,,ii7 ,special rule ,in any case in which there is a distribution with respect to a residence which is acquired by the beneficiary and another person jointly and such other person makes distributions from an ,american dream account in connection with such acquisition1 subclause 7,i7 shall be applied by substituting #bej1jjj for #ejj1jjj4 7ii7 ,lifetime limitation ,no amount shall be treated as a qualified first-time homebuyer distribution if the beneficiary has previously made a qualified first-time home buyer distribution from an ,american dream account in any preceding year4 7,d7 ,amount included in income in year sold before #c years 7i7 ,in general ,if the principal residence acquired by the taxpayer in a distribution described in subparagraph 7,a7 is sold before the date that is #c years after the date on which such principal residence was acquired1 the amount which would have been included in gross income in the year of the distribution shall be included in gross income in the year in which such principal residence is sold4 7ii7 ,exceptions ,clause 7i7 shall not apply to any sale if1 during the period described in such clause1 one of the following events occurs3 7,i7 ,the death of the taxpayer or the spouse of the taxpayer4 7,,ii7 ,a change in the legal marital status of the taxpayer4 7,,iii7 ,a change in the number of the dependents of the taxpayer4 7,,iv7 ,the termination of the employment of the taxpayer or the taxpayer's spouse4 7,v7 ,a change in the required location of employment 7including in connection with ,government orders received by the taxpayer1 or the taxpayer's spouse7 for qualified official extended duty service 7as defined in section #cf7;f77#d77;,e77 to a location of #ej or more miles from the previous location of employment4 7#c7 ,special rules for applying estate and gift taxes with respect to account ,rules similar to the rules of paragraphs 7#b71 7#d71 and 7#e7 of section #ebi7;c7 shall apply for purposes of this section4 7#d7 ,additional tax for distributions not used for qualified expenses 7,a7 ,in general ,the tax imposed by this chapter for any taxable year on any taxpayer who receives a payment or distribution from an ,american dream account which is includible in gross income shall be increased by #aj percent of the amount which is so includible4 7,b7 ,exceptions ,subparagraph 7,a7 shall not apply if the payment or distribution is-- 7i7 made to the beneficiary 7or to the estate of the beneficiary7 on or after the death of the beneficiary1 or 7ii7 attributable to the beneficiary's being disabled 7within the meaning of section #gb7m77#g771 7,c7 ,contributions returned before certain date ,rules similar to the rules of section #ecj7;d77#d77;,c7 shall apply for purposes of this paragraph4 7#e7 ,rollover contributions 7,a7 ,in general ,paragraph 7#a7 shall not apply to any amount paid or distributed from an ,american dream account to the extent that the amount received is paid1 not later than the #fjth day after the date of such payment or distribution1 into-- 7i7 another ,american dream account for the benefit of the same beneficiary1 7ii7 another ,american dream account the beneficiary of which 7referred to in this paragraph as a transferee beneficiary7 is a member of the family of the beneficiary of the ,american dream account with respect to which the distribution was made1 or 7iii7 a ,roth ,,ira maintained for the benefit of the same beneficiary4 7,b7 ,change in designated beneficiaries at death ,in the case of the death of a beneficiary1 a change in the beneficiary of an ,american dream account shall not be treated as a distribution for purposes of paragraph 7#a7 if the new beneficiary is a member of the family of the old beneficiary4 ,the preceding sentence shall not apply to the extent of any amount in excess of the dollar amount in effect under subsection 7c77#a77;,b74 7,c7 ,limitations on same-beneficiary rollovers ,subparagraph 7,a77i7 shall not apply to any payment or distribution if it applied to any prior payment or distribution during the #ab-month period ending on the date of the payment or distribution4 7,d7 ,dollar limitations 7i7 ,annual limitation for transfers to other beneficiaries ,subparagraph 7,a77ii7 shall only apply to so much of any distribution-- 7,i7 which is paid in a direct trustee-to-trustee transfer1 and 7,,ii7 as does not exceed the amount applicable to the transferee beneficiary under subsection 7c7 for the taxable year 7reduced by the amount of aggregate contributions made during the taxable year to all ,american dream accounts maintained for the benefit of the transferee beneficiary74 7ii7 ,annual limitation for ,roth ,i,r,as ,subparagraph 7,a77iii7 shall only apply to so much of any distribution-- 7,i7 which is paid in a direct trustee-to-trustee transfer1 and 7,,ii7 as does not exceed the amount applicable to the beneficiary under section #djh;,a7c77#b7 for the taxable year 7reduced by the amount of aggregate contributions made during the taxable year to all individual retirement plans maintained for the benefit of the beneficiary74 7iii7 ,lifetime account limitation ,clauses 7ii7 and 7iii7 of subparagraph 7,a7 shall not apply to any payment or distribution made from an ,american dream account if the aggregate amount of payments or distributions made from such account during the taxable year and all prior taxable years to which such clauses applied 7determined without regard to this subparagraph7 exceeds #ajj1jjj4 7,e7 ,member of family ,for purposes of this paragraph1 the term member of the family has the same meaning given such term under section #ebi7;e77#b74 7#f7 ,special rules for death and divorce ,rules similar to the rules of paragraphs 7#g7 and 7#h7 of section #bbj7;f7 shall apply4 7e7 ,tax treatment of accounts ,rules similar to the rules of paragraphs 7#b7 and 7#d7 of section #djh7;e7 shall apply to any ,american dream account4 7f7 ,community property laws ,this section shall be applied without regard to any community property laws4 7g7 ,custodial accounts ,for purposes of this section1 a custodial account shall be treated as a trust under this section if the assets of such account are held by a bank 7as defined in section #djh7n77 or another person who demonstrates1 to the satisfaction of the ,secretary1 that the manner in which he will administer the account will be consistent with the requirements of this section1 and if the custodial account would1 except for the fact that it is not a trust1 constitute a trust which meets the requirements of subsection 7b74 ,for purposes of this title1 in the case of a custodial account treated as a trust by reason of the preceding sentence1 the custodian of such account shall be treated as the trustee thereof4 7h7 ,reports 7#a7 ,in general ,the trustee of an ,american dream account shall make such reports regarding such account to the ,secretary and to the beneficiary with respect to contributions1 distributions1 and such other matters as the ,secretary may require4 ,the reports required by this subsection shall be filed at such time and in such manner and furnished to such individuals at such time and in such manner as may be required4 7#b7 ,rollover distributions ,in the case of any distribution described in subsection 7d77#e77;,d71 the officer or employee having control of the ,american dream account 7or their designee7 shall provide a report to the trustee of the ,roth ,,ira or ,american dream account to which the distribution is made4 ,such report shall be filed at such time and in such manner as the ,secretary may require and shall include information with respect to the contributions1 distributions1 and earnings of the ,american dream account as of the date of the distribution described in subsection 7d77#e77;,d71 together with such other matters as the ,secretary may require4 4 7b7 ,tax on excess contributions 7#a7 ,in general ,section #digc7;a7 of the ,internal ,revenue ,code of #aihf is amended by striking or at the end of paragraph 7#e71 by inserting or at the end of paragraph 7#f71 and by inserting after paragraph 7#f7 the following new paragraph3 7#g7 an ,american dream account 7as defined in section #ecj;,b71 4 7#b7 ,excess contribution ,section #digc of such ,code is amended by adding at the end the following new subsection3 7i7 ,excess contributions to ,american dream accounts ,for purposes of this section-- 7#a7 ,in general ,in the case of ,american dream accounts 7within the meaning of section #ecj;,b71 the term excess contributions means the sum of-- 7,a7 the amount 7if any7 by which the amount contributed for the taxable year to such accounts exceeds the dollar amount in effect under section #ecj;,b7c7 with respect to the beneficiary1 and 7,b7 the amount determined under this subsection for the preceding taxable year1 reduced by the sum of-- 7i7 the distributions out of the accounts for the taxable year 7other than rollover distributions71 and 7ii7 the excess 7if any7 of the maximum amount which may be contributed to the accounts for the taxable year over the amount contributed to the accounts for the taxable year4 7#b7 ,special rule ,for purposes of paragraph 7#a71 the following contributions shall not be taken into account3 7,a7 ,any contribution which is distributed out of an ,american dream account in a distribution to which section #ecj;,b7d77#d77;,c7 applies4 7,b7 ,any rollover contribution4 4 7c7 ,tax on prohibited transactions ,section #dige7;e77#a7 of the ,internal ,revenue ,code of #aihf is amended by striking or at the end of subparagraph 7,f71 by striking the period at the end of subparagraph 7,g7 and inserting 1 or1 and by adding at the end the following new subparagraph3 7,h7 an ,american dream account 7as defined in section #ecj;,b74 4 7d7 ,failure ,to provide reports on ,american dream accounts ,paragraph 7#b7 of section #ffic7;a7 of the ,internal ,revenue ,code of #aihf is amended by striking and at the end of subparagraph 7,f71 by striking the period at the end of subparagraph 7,g7 and inserting 1 and1 and by adding at the end the following new subparagraph3 7,h7 section #ecj;,b7h7 7relating to ,american dream accounts74 4 7e7 ,rollovers to ,roth ,i,r,as ,section #djh;,a7e7 of the ,internal ,revenue ,code of #aihf is amended by striking and at the end of subparagraph 7,b77ii71 by striking the period at the end of subparagraph 7,c7 and inserting 1 and1 and by adding at the end the following new subparagraph3 7,d7 from an ,american dream account to the extent provided in section #ecj;,b7d77#e77;,a77iii74 4 7f7 ,clerical amendment ,the table of parts for subchapter ,f of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new item3 ,,part ,x--,american ,dream ,accounts 4 7g7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbf4