[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2316 Introduced in Senate (IS)]

  2d Session
                                S. 2316

   To amend the Internal Revenue Code of 1986 to allow penalty-free 
  withdrawals from individual retirement plans for adoption expenses.


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                   IN THE SENATE OF THE UNITED STATES

                             April 8, 2004

 Ms. Murkowski (for herself and Ms. Landrieu) 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 allow penalty-free 
  withdrawals from individual retirement plans for adoption expenses.

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

SECTION 1. PENALTY-FREE WITHDRAWALS FROM INDIVIDUAL RETIREMENT PLANS 
              FOR ADOPTION EXPENSES.

    (a) Short Title.--This section may be cited as the ``Adoption 
Assistance Act''.
    (b) In General.--Paragraph (2) of section 72(t) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
subparagraph:
                    ``(G) Qualified adoption expenses.--
                            ``(i) In general.--Distributions from an 
                        individual retirement plan to the extent that 
                        the amount of such distributions does not 
                        exceed the lesser of--
                                    ``(I) $10,000 for the taxable year 
                                with respect to the adoption of a 
                                child, or
                                    ``(II) the amount determined under 
                                clause (ii).
                            ``(ii) Determination of expenses not 
                        covered by credit.--The amount determined under 
                        this clause is the excess (if any) of--
                                    ``(I) the qualified adoption 
                                expenses (as defined in section 23(d)) 
                                paid by the taxpayer during the taxable 
                                year with respect to the adoption of 
                                such child, over
                                    ``(II) the amount of the credit 
                                allowable under section 23 for such 
                                expenses (determined as if such credit 
                                were allowed for such year without 
                                regard to any limitation based on 
                                liability for tax).
                            ``(iii) Special rules for child with 
                        special needs.--In the case of an adoption of a 
                        child with special needs (as defined in section 
                        23(d)(3))--
                                    ``(I) subclauses (I) and (II) of 
                                clause (i) shall not apply, and
                                    ``(II) a distribution during the 
                                applicable period from an individual 
                                retirement plan with respect to such 
                                adoption shall not be taken into 
                                account under this subparagraph to the 
                                extent that such distribution, when 
                                added to all other distributions with 
                                respect to such adoption from 
                                individual retirement plans for the 
                                applicable period, exceeds $10,000.
                        For purposes of subclause (II), the term 
                        `applicable period' means the 3-taxable year 
                        period beginning with the taxable year in which 
                        such adoption becomes final.
                            ``(iv) Ordering rule.--Distributions shall 
                        not be taken into account under clause (i) if 
                        such distributions are described in 
                        subparagraph (A), (C), (D), (E), or (F) or to 
                        the extent paragraph (1) does not apply to such 
                        distributions by reason of subparagraph (B).
                            ``(v) Reconciliation allowed.--
                        Distributions shall not be taken into account 
                        under this subparagraph for any taxable year if 
                        such distributions are paid on or before the 
                        day prescribed by law for filing the taxpayer's 
                        return for such taxable year into the 
                        individual retirement plan from which such 
                        distributions were made.''.
    (c) Effective Date.--The amendment made by this section shall apply 
to distributions after the date of the enactment of this Act.
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