Section 1 Short title
This Act may be cited as the “Family Attribution Modernization Act”.
Family Attribution Modernization Act
A BILL
To amend section 414 of the Internal Revenue Code of 1986 to update the family attribution rule.
Sec. 2 Reform of family attribution rule
in subsection (b)—
by striking “For purposes of” and inserting the following:
“(1) In general—For purposes of”
by adding at the end the following new paragraphs:
“(2) Special rules for applying family attribution—For purposes of applying the attribution rules under section 1563 with respect to paragraph (1), the following rules apply:
“(A) Community property laws shall be disregarded for purposes of determining ownership.
“(B) Any ownership that is not attributed to a spouse by reason of section 1563(e)(5) shall also not be attributed to the minor children of the owner and the attribution rule in paragraph (6)(A) shall not apply to such ownership.
“(3) Plan shall not fail to be treated as satisfying this section—If application of paragraph (2) causes two or more entities to be a controlled group, or an affiliated service group, or to no longer be in a controlled group or an affiliated service group, such change shall be treated as a transaction to which section 410(b)(6)(C) applies.”
in subsection (m)(6)(B), by striking “apply” and inserting “apply, except that community property laws shall be disregarded for purposes of determining ownership”.
Effective date— The amendments made by this section shall apply to plan years beginning on or after the date of the enactment of this section.