7 10 11 12 13 14 15 16 17 18 19 20 21 22 23 341 "(ii) any person who is a member of the family of the donor (within the meaning of section 267(cX4)), or "(iii) any other person who owns more than 25 percent in value of any clam of outstanding employer securities under the previ sions of section 318(a); "(D) such contribution er gift le made only pursuant to the provisions of such tax credit employee stock ownership plan or such employes stock ownership plan; "(E) such plan treats such employer securities as being attributable to employer contribu Lions; "(F) ne deduction under section 404 and no credit under section 38 or 440 is allowed with re spect to such contribution or gift; "(0) any allocation under the plan of such •contribution or gift which is based on compensation of the participants does not take into account any portion of the compensation of a participant that exceeds $100,000 per year.". (b) PRECENTAGE LIMITATIONS-Subparagraph (A) of 24 section 170(b)(1) (relating to percentage limitations for indi25 viduals) is amended— 24-384 96-43 and 842 (1) by striking det "or" at the end of clause (vii), (2) by inserting "or" at the end of clause (viii), (3) by inserting after clause (viii) the following new clause: "(ix) a tax credit employee stock ownership plan (as defined in section 409A) or an employee stock ownership plan (as defined in section 4$75(eX(7)),”. (c) CONFORMINO AmendmentS.— (1) Subsection (a) of section 2055 (relating to transfers for publik, religious, and charitable uses) in amended (A) by striking out "or" at the end of paragraph (3), (B) by striking out the period at the end of paragraph (4) and inserting in lieu thereof "; or", and (C) by inserting after paragraph (4) the following new paragraph: "(5) to a fax credit employee stock ownership plan (as defined in section 409A) or an employee stock ownership plan (as defined in section 4975(n)(7)) but only if the requirements of section 170(c)(6) are met.”. Б 7. 10 11 12 13 14 15 16 843 (2) Bubsection (a) of section 2522 (relating to charitable and similar gifta) is amended (A) by striking out the period at the end of paragraph (4) and inserting in lieu thereof "; or", and (13) by adding at the end thereof the following new paragraph: "(5) a tax credit employee stock ownership plan (as defined in section 409A) or an employee stock ownership plan (as defined in section 4975(e)(7)) but only if the requirements of section 170(cX6) are met.". (3) Section 415 (relating to limitations on benefita and contributions under qualified plans), as amended by this Act, is amended by adding at the end thereof the following new subsection: "(m) CHARITABLE CONTRIBUTIONS-The limitations 17 provided under this section shall not apply with respect lo 18 any contribution or gift described in section 170(cX®) if the 19 requirements of section 170(c)(6) are met.". 20 (d) Epprotive DATE.-The amendments made by this 21 section shall apply to taxable years beginning after the date 22 of enactment of this Act. This is in response to your requests dated April 6 and H.R. 3485 would permit an employee stock ownership plan It is our understanding that this proposal would not affect the income tax or gift tax consequences of the transaction described. H.R. 3485 would apply to transfers made by trusts to or for the use of an ESOP after the date of enactment of this bill. Assuming an effective date of October 1, 1992, we estimate that this bill would reduce Federal fiscal year budget receipts by less than $1 million annually. I hope this information is helpful to you. If we can be of further assistance in this matter, please let me know. Sincerely, Have shetman Harry L. Gutman |