Section 1 Short title
This Act may be cited as the “Tax Relief for our Nation’s Heroes Act” or the “Andrew P. Carpenter Tax Act”.
Tax Relief for our Nation’s Heroes 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 or disabled veterans.
Sec. 2 Discharge of indebtedness income on education loans of deceased or disabled 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 or disabled veterans
“(A) In general—In the case of any student loan described in subparagraph (C) of a covered individual, 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 signer or cosigner on such loan.
“(B) Covered individual—The term covered individual means an individual—
“(i) who is a veteran or member of the Armed Forces of the United States, who served on active duty in the Armed Forces of the United States, and
“(ii) who—
“(I) is deceased—
“(aa) as a result of a service-connected death, or
“(bb) as a result of a service-connected disability incurred as a result of such active duty service, or
“(II) has a service-connected disability the Secretary of Veterans Affairs has rated as total.
“(C) 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).
“(D) Service-connected—For purposes of subparagraph (A), the term service-connected 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 2-year period beginning on the date of the enactment of this Act.