[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1729 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 1729

 To amend the Internal Revenue Code of 1986 to provide that providers 
  rather than purchasers of funeral services shall be treated as the 
               owners of certain pre-need funeral trusts.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 25, 1995

 Mrs. Mink of Hawaii 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 provide that providers 
  rather than purchasers of funeral services shall be treated as the 
               owners of certain pre-need funeral trusts.
    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. TREATMENT OF FUNERAL SERVICE PROVIDER RATHER THAN PURCHASER 
              AS OWNER OF CERTAIN PRE-NEED FUNERAL TRUSTS.

    (a) In General.--Section 672 of the Internal Revenue Code of 1986 
(relating to definitions and rules) is amended by adding at the end the 
following new subsection:
    ``(g) Special Rule for Certain Pre-Need Funeral Trusts.--
            ``(1) In general.--Notwithstanding any other provision of 
        this title, if--
                    ``(A) any individual would (but for this 
                subsection) be treated under this subpart as the owner 
                of any portion of a trust, and
                    ``(B) such trust is a qualified pre-need funeral 
                trust,
        the provider of funeral services referred to in paragraph 
        (3)(B) (and not such individual) shall be treated as the owner 
        of such portion.
            ``(2) Exception if income distributed to purchaser.--
        Paragraph (1) shall not apply with respect to any income which 
        is distributed to the individual described in paragraph (1)(A).
            ``(3) Qualified pre-need funeral trust.--For purposes of 
        this subsection, the term `qualified pre-need funeral trust' 
        means a trust established exclusively to pay for the funeral 
        (and associated costs) of one individual if--
                    ``(A) such individual is the individual referred to 
                in paragraph (1)(A) or a member of such individual's 
                family (as defined in section 2032A(e)(2)),
                    ``(B) the provider of the funeral services for such 
                funeral is specified in the trust instrument or in an 
                agreement pursuant to which the trust is established,
                    ``(C) an agreement which is in effect between such 
                individual and such provider specifies that such 
                provider shall be treated as described in paragraph (1) 
                and such agreement is entered into on or before the 
                date on which the trust is established,
                    ``(D) the trustee of the trust agrees to furnish to 
                such provider, at the time and in the manner prescribed 
                by the Secretary, such information as is necessary for 
                the provider to comply with this subsection, and
                    ``(E) such trust is established before the death of 
                such individual or the member of the individual's 
                family, as the case may be.''
    (b) Effective Date.--
            (1) In general.--The amendment made by this section shall 
        apply to items which, but for such amendment, would be taken 
        into account in taxable years of a grantor which end after the 
        date of the enactment of this Act.
            (2) Trusts established before date of enactment.--In the 
        case of a trust established before the date of the enactment of 
        this Act, section 672(g)(3)(C) of such Code (as added by this 
        section) shall be applied by treating an agreement which is 
        entered into before the end of the 1-year period beginning with 
        the date of the enactment of this Act as if such agreement were 
        entered into on or before the date on which the trust was 
        established.
                                 <all>