Sec. 5203. Excise tax on failure to distribute within 5 years contribution to donor advised fund
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Subchapter G of chapter 42 is amended by adding at the end the following new section: In the case of a contribution which is held in a donor advised fund, there is hereby imposed a tax equal to 20 percent of so much of the portion of such contribution as has not been distributed by the sponsoring organization in an eligible distribution before the beginning of the 6th (or succeeding) taxable year beginning after the taxable year during which such contribution was made. The tax imposed by this subsection shall be paid by such sponsoring organization.
For purposes of this section— The term eligible distribution means any distribution to an organization described in section 170(b)(1)(A) (other than an organization described in section 509(a)(3) or any fund or account described in section 4966(d)(2). Distributions shall be treated as made from contributions (and any earnings attributable thereto) on a first-in, first-out basis. . The table of sections for subchapter G of chapter 42 is amended by adding at the end the following new item:
Sec. 4968. Failure to distribute contributions within 5 years. . Except as provided in paragraph (2), the amendments made by this section shall apply to contributions made after December 31, 2014. In the case of any contribution— which was made before January 1, 2015, and any portion of which (including any earnings attributable thereto) is held in a donor advised fund on such date, such portion shall be treated as contributed on such date.