,,ii  #aai? ,,congress  #a/ ,session    
,s4 #icj  ,,9 ,,! ,,s5ate ,,( ,,!       
,,unit$ ,,/ates  ,m>* #aa 7legislative  
day1 ,m>* #aj71 #bjbe,mr4 ,mc,connell   
introduc$ ! foll[+ bill2 :i* 0 read     
twice & ref]r$ to ! ,committee on       
,f9ance  ,a ,,bill  ,to am5d ! ,int]nal 
,rev5ue ,code ( #aihf to exclude f gross
 income capital ga9s f ! sale ( c]ta9   
f>ml& prop]ty :i* are re9ve/$ 9         
individual retirem5t plans4  #a4        
,exclusion ( c]ta9 capital ga9s f ! sale
 ( c]ta9 f>ml& prop]ty  7a7 ,9 g5]al ,"p
 ,,iii ( sub*apt] ,b ( *apt] #a ( !     
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by ins]t+ aft] section #aci;,i ! foll[+ 
new section3  #aci;,j4 ,ga9 f ! sale or 
ex*ange ( qualifi$ f>ml& prop]ty to     
qualifi$ f>m]s  7a7 ,9 g5]al ,if a      
taxpay] makes an election "u ?is section
 & files ! agreem5t ref]r$ to 9         
subsection 7d77#b71 gross income %all n 
include s mu* ( ! ga9 f ! sale or       
ex*ange ( qualifi$ f>ml& prop]ty to a   
qualifi$ f>m] z does n exce$ ! aggregate

 am\nt contribut$ by ! taxpay] to an    
individual retirem5t plan dur+ !        
#fj-;day p]iod beg9n+ on ! date ( su*   
sale or ex*ange4  7b7 ,qualifi$ f>ml&   
prop]ty2 qualifi$ f>m] ,= purposes ( ?is
 section-- 7#a7 ,qualifi$ f>ml& prop]ty 
,! t]m qualifi$ f>ml& prop]ty means real
 prop]ty locat$ 9 ! ,unit$ ,/ates :i*-- 
7,a7 has be5 us$ by ! taxpay] z a f>m = 
f>m+ purposes1 or  7,b7 leas$ by !      
taxpay] to a f>m] = f>m+ purposes1  dur+
 sub/antially all ( ! #aj-ye> p]iod end+
 on ! date ( ! qualifi$ sale or ex*ange4
  7#b7 ,qualifi$ f>m] ,! t]m qualifi$   
f>m] means any individual :o-- 7,a7 is  
actively engag$ 9 f>m+ 7)9 ! mean+ (    
subsections 7b7 & 7c7 ( section #ajja ( 
! ,food ,security ,act ( #aihf 7#g      
,u4,s4,c4 #acjh-a7;b7 & 7c7771 &  7,b7  
is designat$ 9 an agreem5t "u subsection
 7d77#b74  7c7 ,tax treatm5t ( fur!r    
dispositions or non-,f>m use  7#a7 ,9   
g5]al ,if1 )9 #aj ye>s aft] ! date ( !  
sale or ex*ange-- 7,a7 ! qualifi$ f>m]  
disposes ( any int]e/ 9 qualifi$ f>ml&  

prop]ty1 or  7,b7 ! qualifi$ f>m] ceases
 to use ! qualifi$ f>ml& prop]ty z a f>m
 = f>m+ purposes1  !n1 9 addition to any
 o!r tax1 !re is h]eby impos$ = !       
taxable ye> ( su* disposition or cease 9
 use1 a tax 9 ! am\nt det]m9$ "u        
p>agraph 7#b74  7#b7 ,am\nt ( tax ,!    
am\nt ( tax det]m9$ "u ?is p>agraph is  
an am\nt equal to ! sum (-- 7,a7 !      
product (-- 7i7 ! am\nt exclud$ f !     
gross income "u subsection 7a71 &  7ii7 
! sum (-- 7,i7 ! highe/ rate ( tax on   
adju/$ net capital ga9 "u section       
#a7;h71 plus  7,,ii7 ! rate ( tax       
applicable "u section #adaa1 plus  7,b7 
int]e/ at ! und]paym5t rate e/abli%$ "u 
section #ffba on ! am\nt det]m9$ "u     
subp>agraph 7,a7 = ea* prior taxable ye>
 = ! p]iod beg9n+ ) ! taxable ye> 9 :i* 
! sale or ex*ange occurr$4  7#c7        
,liability = tax ,! qualifi$ f>m] %all  
be p]sonally liable = ! additional tax  
impos$ by ?is subsection4  7#d7 ,p>tial 
dispositions ,= purposes ( ?is          
subsection1 :]e ! qualifi$ f>m] disposes

 ( a portion ( ! qualifi$ f>ml& acquir$ 
by su* qualifi$ f>m] or !re is a        
cessation ( use ( su* a portion z a f>m 
= f>m+ purposes1 ! am\nt det]m9$ "u     
p>agraph 7#b77;,a77i7 %all be ! am\nt   
:i* be>s ! same ratio ! am\nt o!rwise   
det]m9$ "u su* p>agraph z-- 7,a7 !      
portion ( ! qualifi$ f>ml& s dispos$ or 
ceas$ to be us$1 be>s to  7,b7 ! entire 
am\nt ( ! qualifi$ f>ml& s acquir$4  7d7
 ,election  7#a7 ,9 g5]al ,an election  
"u subsection 7a7 %all be made at su* "t
 & 9 su* =m & mann] z ! ,secret>y %all  
prescribe4 ,su* an election1 once made1 
%all be irrevocable4  7#b7 ,agreem5t ,! 
agreem5t ref]r$ to 9 ?is p>agraph is a  
writt5 agreem5t sign$ by ! qualifi$ f>m]
 designat$ 9 su* agreem5t cons5t+ to !  
application ( subsection 7c7 ) respect  
to ! qualifi$ f>ml& prop]ty4 ,su*       
agreem5t %all include a /atem5t indicat+
 ! am\nt describ$ 9 subsection          
7c77#b77;,a77i74  7e7 ,def9itions &     
special rules ,= purposes ( ?is         
section-- 7#a7 ,f>m2 f>m+ purposes ,=   

purposes ( ?is section1 ! t]ms f>m &    
f>m+ purposes h ! respective mean+s giv5
 su* t]ms "u section #bjcb;,a7e74  7#b7 
,/atute ( limitations ,if qualifi$ f>ml&
 prop]ty is dispos$ ( or ceases to be   
us$ z a f>m = f>m+ purposes1 !n-- 7,a7 !
 /atutory p]iod = ! assessm5t ( any tax 
"u subsection 7c7 attributable to su*   
disposition or cessation %all n expire  
be=e ! expiration ( #c ye>s f ! date !  
,secret>y is notifi$ 79 su* mann] z !   
,secret>y may by regulations prescribe7 
( su* disposition or cessation1 &  7,b7 
su* tax may be assess$ be=e ! expiration
 ( su* #c-ye> p]iod not)/&+ ! provisions
 ( any o!r law or rule ( law :i* w\ld   
o!rwise prev5t su* assessm5t4  7#c7     
,involunt>y conv]sions & l-k9d ex*anges 
7,a7 ,involunt>y conv]sions ,"u         
regulations provid$ by ! ,secret>y1 no  
tax %all be impos$ "u subsection 7c7 if 
!re is an involunt>y conv]sion 7)9 !    
mean+ ( section #bjcb;,a7h77#c7 ( an    
int]e/ 9 qualifi$ f>ml& prop]ty4  7,b7  
,l-k9d ex*anges ,rules simil> to ! rules

 ( section #bjcb;,a7i7 %all apply :]e   
qualifi$ f>ml& prop]ty is dispos$ ( 9 a 
transaction :i* qualifies "u section    
#ajca4  7#d7 ,no d\ble b5efit ,no       
d$uction %all be all[$ "u section #bai )
 respect s mu* ( ! qualifi$ retirem5t   
contributions = ! taxable ye> z does n  
exce$ ! am\nt exclud$ f income "u       
subsection 7a74  4  7b7 ,waiv] (        
contribution limitation ,section #djh ( 
! ,int]nal ,rev5ue ,code ( #aihf is     
am5d$ by r$esignat+ subsection 7r7 z    
subsection 7s7 & by ins]t+ aft]         
subsection 7q7 ! foll[+ new subsection3 
7r7 ,increas$ limitation = contributions
 ( qualifi$ f>ml& ga9  7#a7 ,9 g5]al ,= 
purposes ( apply+ subsections 7a77#a7 & 
7b77#b77;,b71 ! am\nt 9 effect "u       
section #bai7;b77#a77;,a7 = any taxable 
ye> %all be increas$ by ! less] (-- 7,a7
 ! aggregate am\nt ( ga9 by ! taxpay] f 
! sale or ex*ange ( qualifi$ f>ml&      
prop]ty to a qualifi$ f>m] dur+ ! p]iod 
beg9n+ #fj days be=e ! fir/ day ( su*   
taxable ye> & end+ ) ! la/ day ( su*    

taxable ye>1 or  7,b7 ! am\nt contribut$
 dur+ ! #fj-;day p]iod end+ ) su* sale  
or ex*ange to individual retirem5t plans
 ( ! taxpay]4  7#b7 ,def9itions ,any t]m
 us$ 9 ?is section :i* is us$ 9 section 
#aci;,j %all h ! mean+ giv5 su* t]m "u  
su* section4  4  7c7 ,cl]ical am5dm5t ,!
 table ( sections = "p ,,iii ( sub*apt] 
,b ( *apt] #a ( ! ,int]nal ,rev5ue ,code
 ( #aihf is am5d$ by ins]t+ aft] ! item 
relat+ to section #aci;,i ! foll[+ new  
item3  ,sec4 #aci;,j4 ,ga9 f ! sale or  
ex*ange ( qualifi$ f>ml& prop]ty to     
qualifi$ f>m]s4  4  7d7 ,effective date 
,! am5dm5ts made by ?is section %all    
apply to sales or ex*anges 9 taxable    
ye>s beg9n+ aft] ! date ( ! enactm5t (  
?is ,act4