[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 4 Introduced in Senate (IS)]







107th CONGRESS
  2d Session
                                  S. 4

    To amend the Internal Revenue Code of 1986 to treat earnings on 
contributions to tax-deferred savings accounts as gain from the sale or 
                      exchange of a capital asset.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           November 19, 2002

   Mr. Gramm introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
    To amend the Internal Revenue Code of 1986 to treat earnings on 
contributions to tax-deferred savings accounts as gain from the sale or 
                      exchange of a capital asset.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. TREATMENT OF EARNINGS ON CONTRIBUTIONS TO TAX-DEFERRED 
              SAVINGS ACCOUNTS.

    (a) In General.--Part IV of subchapter P of chapter 1 of the 
Internal Revenue Code of 1986 (relating to special rules for 
determining capital gains and losses) is amended by adding at the end 
the following new section:

``SEC. 1261. EARNINGS ON CONTRIBUTIONS TO TAX-DEFERRED SAVINGS 
              ACCOUNTS.

    ``(a) In General.--For purposes of this subtitle, net income 
allocable to any contribution to a plan which is includible in gross 
income under section 72 shall be treated as gain from the sale or 
exchange of a capital asset.
    ``(b) Plan.--For purposes of this section, the term `plan' has the 
meaning given such term by section 4975(e)(1).''.
    (b) Clerical Amendment.--The table of sections for part IV of 
subchapter P of chapter 1 of such Code is amended by adding after the 
item relating to section 1260 the following new item:

                              ``Sec. 1261. Earnings on contributions to 
                                        tax-deferred savings 
                                        accounts.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts received in taxable years beginning after the date of 
the enactment of this Act.
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