Section 1 Short title
This Act may be cited as the “Andrew P. Carpenter Tax Act”.
Andrew P. Carpenter Tax Act
A BILL
To amend the Internal Revenue Code of 1986 to exclude from gross income any discharge of indebtedness income on education loans of deceased veterans.
Sec. 2 Discharge of indebtedness income on education loans of deceased veterans
In general— Subsection (f) of section 108 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(5) Deceased veterans
“(A) In general—In the case of any student loan described in subparagraph (B) of an individual who is a veteran who served on active duty in the Armed Forces of the United States and who is deceased as a result of a service-connected disability, no amount which (but for this paragraph) would otherwise be includible in gross income by reason of the discharge (in whole or in part) of such loan shall be includible in gross income of any cosigner on such loan.
“(B) Student loan described—For purposes of subparagraph (A), a student loan described in this subparagraph is a loan that—
“(i) is made, insured, or guaranteed under title IV of the Higher Education Act of 1965, or
“(ii) is a private education loan (as defined in section 140(a)(7) of the Truth in Lending Act (15 U.S.C. 1650(a)(7))), made by an entity (other than an entity described in paragraph (2)) to an individual to assist the individual in attending an educational organization described in section 170(b)(1)(A)(ii).
“(C) Service-connected disability—For purposes of subparagraph (A), the term service-connected disability has the meaning given such term by section 101(16) of title 38, United States Code.”
Effective date— The amendments made by this section shall apply to discharges of indebtedness occurring on or after October 7, 2001.
Waiver of limitation for credits and refunds attributable to this Act— If the credit or refund of any overpayment of tax resulting from the application of the amendment made by subsection (a) to a period before the date of enactment of this Act is prevented as of such date by the operation of any law or rule of law (including res judicata), such credit or refund may nevertheless be allowed or made if the claim therefor is filed before the close of the 1-year period beginning on the date of the enactment of this Act.