Sec. 111. Tax treatment

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Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 139G the following new section: Gross income shall not include— any contribution credited to the AO account of the taxpayer under section 103(a)(3) of the American Opportunity Accounts Act , and any distribution from such an AO account. . Subchapter F of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new part: Sec. 530A.

American Opportunity Fund and AO accounts. The American Opportunity Fund and AO accounts shall be exempt from taxation under this subtitle. Notwithstanding the preceding sentence, a AO account shall be subject to the taxes imposed by section 511 (relating to imposition of tax on unrelated business income of charitable organizations). For purposes of this section, the terms American Opportunity Fund and AO account have the meanings given such terms under title I of the American Opportunity Accounts Act . .

The table of sections for part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item related to section 139G the following new item: Sec. 139H. Contributions to and distributions from AO accounts. . The table of parts for subchapter F of chapter 1 of such Code is amended by adding at the end the following new item: Part IX—American Opportunity Fund and AO accounts . The amendments made by this section shall apply to taxable years beginning after December 31, 2018.