Page:United States Statutes at Large Volume 111 Part 1.djvu/853

 PUBLIC LAW 105-34—AUG. 5, 1997 111 STAT. 829 "(A) the amount contributed for the taxable year to such accounts (other than a quahfied rollover contribution described in section 408A(e)), over "(B) the amount allowable as a contribution under sections 408A (c)(2) and (c)(3), and "(2) the amount determined under this subsection for the preceding taxable year, reduced by the sum of— (A) the distributions out of the accounts for the taxable year, and "(B) the excess (if any) of the maximum amount allowable as a contribution under sections 408A (c)(2) and (c)(3) for the taxable year over the amount contributed to the accounts for the taxable year. For purposes of this subsection, any contribution which is distributed from a Roth IRA in a distribution described in section 408(d)(4) shall be treated as an amount not contributed.". (c) SPOUSAL IRA.— Clause (ii) of section 219(c)(1)(B) is amended to read as follows: "(ii) the compensation includible in the gross income of such individual's spouse for the taxable year reduced by— "(I) the amount allowed as a deduction under subsection (a) to such spouse for such taxable year, and "(II) the amount of any contribution on behalf of such spouse to a Roth IRA under section 408A for such taxable year.". (d) AUTHORITY TO PRESCRIBE NECESSARY REPORTING.— Section 408(i) is amended— (1) by striking "under regulations", and (2) by striking "in such regulations" each place it appears. (e) CONFORMING AMENDMENT. —The table of sections for subpart A of part I of subchapter D of chapter 1 is amended by inserting after the item relating to section 408 the following new item: "Sec. 408A. Roth IRAs.". (f) EFFECTIVE DATE.—The amendments made by this section 26 USC 219 note. shall apply to taxable years beginning after December 31, 1997. SEC. 303. DISTRIBUTIONS FROM CERTAIN PLANS MAY BE USED WITH- OUT PENALTY TO PURCHASE FIRST HOMES. (a) IN GENERAL. — Paragraph (2) of section 72(t) (relating to exceptions to 10-percent additional tax on early distributions from qualified retirement plsms), as amended by section 203, is amended by adding at the end the following new subparagraph: " (F) DISTRIBUTIONS FROM CERTAIN PLANS FOR FIRST HOME PURCHASES. —Distributions to an individual from an individual retirement plan which are qualified first-time homebuyer distributions (as defined in paragraph (8)). Distributions shall not be taken into account under the preceding sentence if such distributions are described in subparagraph (A), (C), (D), or (E) or to the extent paragraph (1) does not apply to such distributions by reason of subparagraph (B).". (b) DEFINITIONS. — Section 72(t), as amended by section 203, is amended by adding at the end the following new paragraphs: "(8) QUALIFIED FIRST-TIME HOMEBUYER DISTRIBUTIONS. — For purposes of paragraph (2)(F)—

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