Sec. 101. Tax treatment of proceeds and payments of future income
147 words·~1 min read·
/bill/116/s/2114/is/section-101·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
For purposes of the Internal Revenue Code of 1986: In the case of an individual, gross income shall not include the amount of any income-share funding that is credited toward the tuition or other obligations of, or paid to or on behalf of, such individual under a Qualified ISA. In the case of a Qualified ISA under which the income-share funding exceeds the total income-share payments (in any period over the life of the contract), the individual’s gross income shall not include the amount of such excess.
The amount of any income-share payments under a Qualified ISA shall be treated— first, with respect to so much of such amount as does not exceed the income-share funding under such Qualified ISA, as a recovery of investment (with a corresponding reduction in basis) in the contract; and second, as income on the contract which is includible in gross income.