CONTENTS Page 1. H.R. 4667 (Mr. Guarini and others): Charitable Contributions of Certain Inventory to Scientific 2. H.R. 4948 (Mr. Matsui): Extension of Cash and Deferred Plan Rules to Salary Reduction Arrangements Under Money Purchase Pension 3. H.R. 5177 (Mr. Brinkley and others): Conveyance of Certain Land to Fort Carson as Involuntary 4. H.R. 5470 (Messrs. Jacobs, Holland, Guarini, Duncan, and Vander Jagt): Exclusion from Gross Income of Certain Payments for Personal 5. H.R. 5573 (Messrs. Stark, Shannon, Bafalis, Gephardt, Holland, Rangel, and Archer, and others): Special One-Year Rules for Charitable INTRODUCTION The bills described in this pamphlet have been scheduled for a public hearing on June 14, 1982, before the House Ways and Means Subcommittee on Select Revenue Measures. There are five bills scheduled for the hearing: H.R. 4667 (relating to charitable contributions of certain inventory to scientific research organizations); H.R. 4948 (extension of cash and deferred plan rules to salary reduction arrangements under money purchase pension plans); H.R. 5177 (conveyance of certain land to Fort Carson as involuntary conversion); H.R. 5470 (exclusion from gross income of certain payments for personal injury damages); and H.R. 5573 (special one-year rules for charitable contributions of technological equipment to primary and secondary schools). The first part of the pamphlet is a summary of the bills. This is followed by a more detailed description of each bill, including present law, issues, explanation of the bill, effective date, and revenue effect. (1) I. SUMMARY 1. H.R. 4667-Mr. Guarini and others Charitable Contributions of Certain Inventory to Scientific Research Organizations Under present law, the amount of charitable deduction allowed for a contribution of ordinary-income property (such as a donation of inventory by a manufacturer) generally is limited to the donor's cost basis in the property. However, a special rule, enacted in the Economic Recovery Tax Act of 1981, applies to corporate donations of newly manufactured scientific equipment to a college or university to be used for research in the United States in the physical or biological sciences (Code sec. 170(e) (4)). Under this special rule, the corporate donor may deduct the sum of its basis in the property plus one-half of the unrealized appreciation (i.e., one-half of the difference between fair market value and basis), but not in excess of twice the basis of the property. The bill would make this special charitable deduction rule also apply to qualifying corporate contributions of newly manufactured scientific equipment to scientific research organizations which are tax-exempt under section 501(c)(3) and which are not private foundations. The provisions of the bill would apply retroactively to charitable contributions made after August 13, 1981 (the effective date for the ERTA provision for corporate donations of newly manufactured scientific equipment to a college or university for research use). 2. H.R. 4948-Mr. Matsui Extension of Cash and Deferred Plan Rules to Salary Reduction Arrangements Under Money Purchase Pension Plans The Employee Retirement Income Security Act of 1974 (ERISA) provided that amounts deferred by an employee pursuant to a cash or deferred arrangement under a tax-qualified profit-sharing, stock bonus or money purchase pension plan are excluded from the employee's income if (1) the plan was in existence on June 27, 1974, and (2) the applicable requirements of prior law were satisfied. This tax treatment for existing plans was preserved, pending study by the Congress of the appropriate treatment for cash or deferred arrangements. Under the Revenue Act of 1978, amounts deferred by an employee after 1979 pursuant to a cash or deferred arrangement under a taxqualified profit-sharing or stock bonus plan are excluded from the employee's income only if certain requirements added by the Act are met. No rules were provided by the 1978 Act for cash or deferred arrangements under money purchase pension plans. (8) |