[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2968 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 2968

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


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 17, 2005

   Mr. King of New York (for himself, Mr. Shimkus, Mr. Grijalva, Mr. 
Burton of Indiana, and Mr. LaHood) 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 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. SHORT TITLE.

    This Act may be cited as the ``Dave Thomas Adoption Act of 2005''.

SEC. 2. PENALTY-FREE WITHDRAWALS FROM INDIVIDUAL RETIREMENT PLANS FOR 
              ADOPTION EXPENSES.

    (a) 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).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to distributions after the date of the enactment of this Act.
                                 <all>