Sec. 13821. Modification of tax treatment of Alaska Native Corporations and settlement trusts
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Part III of subchapter B of chapter 1 is amended by inserting before section 140 the following new section: In the case of a Native Corporation, gross income shall not include the value of any payments that would otherwise be made, or treated as being made, to such Native Corporation pursuant to, or as required by, any provision of the Alaska Native Claims Settlement Act ( 43 U.S.C. 1601 et seq.), including any payment that would otherwise be made to a Village Corporation pursuant to section 7(j) of the Alaska Native Claims Settlement Act ( 43 U.S.C. 1606(j) ), provided that any such payments— are assigned in writing to a Settlement Trust, and were not received by such Native Corporation prior to the assignment described in paragraph (1).
In the case of a Settlement Trust which has been assigned payments described in subsection (a), gross income shall include such payments when received by such Settlement Trust pursuant to the assignment and shall have the same character as if such payments were received by the Native Corporation. The amount and scope of any assignment under subsection
(a)shall be described with reasonable particularity and may either be in a percentage of one or more such payments or in a fixed dollar amount. Any assignment under subsection
(a)shall specify— a duration either in perpetuity or for a period of time, and whether such assignment is revocable. Notwithstanding section 247, no deduction shall be allowed to a Native Corporation for purposes of any amounts described in subsection (a). For purposes of this section, the terms Native Corporation and Settlement Trust have the same meaning given such terms under section 646(h). . The table of sections for part III of subchapter B of chapter 1 is amended by inserting before the item relating to section 140 the following new item: Sec. 139G. Assignments to Alaska Native Settlement Trusts. . The amendments made by this subsection shall apply to taxable years beginning after December 31, 2016. Part VIII of subchapter B of chapter 1 is amended by inserting before section 248 the following new section: In the case of a Native Corporation, there shall be allowed a deduction for any contributions made by such Native Corporation to a Settlement Trust (regardless of whether an election under section 646 is in effect for such Settlement Trust) for which the Native Corporation has made an annual election under subsection (e). The amount of the deduction under subsection
(a)shall be equal to— in the case of a cash contribution (regardless of the method of payment, including currency, coins, money order, or check), the amount of such contribution, or in the case of a contribution not described in paragraph (1), the lesser of— the Native Corporation's adjusted basis in the property contributed, or the fair market value of the property contributed. Subject to paragraph (2), the deduction allowed under subsection
(a)for any taxable year shall not exceed the taxable income (as determined without regard to such deduction) of the Native Corporation for the taxable year in which the contribution was made. If the aggregate amount of contributions described in subsection
(a)for any taxable year exceeds the limitation under paragraph (1), such excess shall be treated as a contribution described in subsection
(a)in each of the 15 succeeding years in order of time. For purposes of this section, the terms Native Corporation and Settlement Trust have the same meaning given such terms under section 646(h). For each taxable year, a Native Corporation may elect to have this section apply for such taxable year on the income tax return or an amendment or supplement to the return of the Native Corporation, with such election to have effect solely for such taxable year. Any election made by a Native Corporation pursuant to this subsection may be revoked pursuant to a timely filed amendment or supplement to the income tax return of such Native Corporation. Notwithstanding section 646(d)(2), in the case of a Native Corporation which claims a deduction under this section for any taxable year, the earnings and profits of such Native Corporation for such taxable year shall be reduced by the amount of such deduction. No gain or loss shall be recognized by the Native Corporation with respect to a contribution of property for which a deduction is allowed under this section. Subject to subsection (g), a Settlement Trust shall include in income the amount of any deduction allowed under this section in the taxable year in which the Settlement Trust actually receives such contribution. The holding period under section 1223 of the Settlement Trust shall include the period the property was held by the Native Corporation. The basis that a Settlement Trust has for which a deduction is allowed under this section shall be equal to the lesser of— the adjusted basis of the Native Corporation in such property immediately before such contribution, or the fair market value of the property immediately before such contribution. No deduction shall be allowed under this section with respect to any contributions made to a Settlement Trust which are in violation of subsection (a)(2) or (c)(2) of section 39 of the Alaska Native Claims Settlement Act ( 43 U.S.C. 1629e ). In the case of a contribution which consists of property other than cash, a Settlement Trust may elect to defer recognition of any income related to such property until the sale or exchange of such property, in whole or in part, by the Settlement Trust. In the case of property described in paragraph (1), any income or gain realized on the sale or exchange of such property shall be treated as— for such amount of the income or gain as is equal to or less than the amount of income which would be included in income at the time of contribution under subsection (f)(3) but for the taxpayer's election under this subsection, ordinary income, and for any amounts of the income or gain which are in excess of the amount of income which would be included in income at the time of contribution under subsection (f)(3) but for the taxpayer's election under this subsection, having the same character as if this subsection did not apply. For each taxable year, a Settlement Trust may elect to apply this subsection for any property described in paragraph
(1)which was contributed during such year. Any property to which the election applies shall be identified and described with reasonable particularity on the income tax return or an amendment or supplement to the return of the Settlement Trust, with such election to have effect solely for such taxable year. Any election made by a Settlement Trust pursuant to this subsection may be revoked pursuant to a timely filed amendment or supplement to the income tax return of such Settlement Trust. In the case of any property for which an election is in effect under this subsection and which is disposed of within the first taxable year subsequent to the taxable year in which such property was contributed to the Settlement Trust— this section shall be applied as if the election under this subsection had not been made, any income or gain which would have been included in the year of contribution under subsection (f)(3) but for the taxpayer's election under this subsection shall be included in income for the taxable year of such contribution, and the Settlement Trust shall pay any increase in tax resulting from such inclusion, including any applicable interest, and increased by 10 percent of the amount of such increase with interest. Notwithstanding section 6501(a), any amount described in subclause
(III)of clause
(i)may be assessed, or a proceeding in court with respect to such amount may be initiated without assessment, within 4 years after the date on which the return making the election under this subsection for such property was filed. . The table of sections for part VIII of subchapter B of chapter 1 is amended by inserting before the item relating to section 248 the following new item: Sec. 247. Contributions to Alaska Native Settlement Trusts. . The amendments made by this subsection shall apply to taxable years for which the period of limitation on refund or credit under section 6511 of the Internal Revenue Code of 1986 has not expired. If the period of limitation on a credit or refund resulting from the amendments made by paragraph
(1)expires before the end of the 1-year period beginning on the date of the enactment of this Act, refund or credit of such overpayment (to the extent attributable to such amendments) may, nevertheless, be made or allowed if claim therefor is filed before the close of such 1-year period. Section 6039H is amended— in the heading, by striking , and sponsoring by adding at the end the following new subsection: Any Native Corporation (as defined in subsection
(m)of section 3 of the Alaska Native Claims Settlement Act ( 43 U.S.C. 1602(m) )) which has made a contribution to a Settlement Trust (as defined in subsection
(t)of such section) to which an election under subsection
(e)of section 247 applies shall provide such Settlement Trust with a statement regarding such election not later than January 31 of the calendar year subsequent to the calendar year in which the contribution was made. The statement described in paragraph
(1)shall include— the total amount of contributions to which the election under subsection
(e)of section 247 applies, for each contribution, whether such contribution was in cash, for each contribution which consists of property other than cash, the date that such property was acquired by the Native Corporation and the adjusted basis and fair market value of such property on the date such property was contributed to the Settlement Trust, the date on which each contribution was made to the Settlement Trust, and such information as the Secretary determines to be necessary or appropriate for the identification of each contribution and the accurate inclusion of income relating to such contributions by the Settlement Trust. . The item relating to section 6039H in the table of sections for subpart A of part III of subchapter A of chapter 61 is amended to read as follows: Sec. 6039H. Information With Respect to Alaska Native Settlement Trusts and Native Corporations. . The amendments made by this subsection shall apply to taxable years beginning after December 31, 2016.
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Sec. 13821
Modification of tax treatment of Alaska Native Corporations and settlement trusts
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