Sec. 315. Reform of family attribution rule
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Section 414 is amended— in subsection (b)— by striking For purposes of and inserting the following: For purposes of , and by adding at the end the following new paragraphs: For purposes of applying the attribution rules under section 1563 with respect to paragraph (1), the following rules apply: Community property laws shall be disregarded for purposes of determining ownership. Except as provided by the Secretary, stock of an individual not attributed under section 1563(e)(5) to such individual’s spouse shall not be attributed to such spouse by reason of the combined application of paragraphs
(1)and (6)(A) of section 1563(e). Except as provided by the Secretary, in the case of stock in different corporations that is attributed to a child under section 1563(e)(6)(A) from each parent, and is not attributed to such parents as spouses under section 1563(e)(5), such attribution to the child shall not by itself result in such corporations being members of the same controlled group. If application of paragraph
(2)causes 2 or more entities to be a controlled group or to no longer be in a controlled group, such change shall be treated as a transaction to which section 410(b)(6)(C) applies. , and in subsection (m)(6)(B)— by striking and inserting the following: Ownership.— In determining Ownership.— In determining , by adding at the end the following new clauses: For purposes of applying the attribution rules under section 318 with respect to clause (i), the following rules apply: Community property laws shall be disregarded for purposes of determining ownership. Except as provided by the Secretary, stock of an individual not attributed under section 318(a)(1)(A)(i) to such individual’s spouse shall not be attributed by reason of the combined application of paragraphs (1)(A)(ii) and
(4)of section 318(a) to such spouse from a child who has not attained the age of 21 years. Except as provided by the Secretary, in the case of stock in different organizations which is attributed under section 318(a)(1)(A)(ii) from each parent to a child who has not attained the age of 21 years, and is not attributed to such parents as spouses under section 318(a)(1)(A)(i), such attribution to the child shall not by itself result in such organizations being members of the same affiliated service group. If the application of clause
(ii)causes two or more entities to be an affiliated service group, or to no longer be in an affiliated service group, such change shall be treated as a transaction to which section 410(b)(6)(C) applies. , and by striking apply in clause (i), as so added, and inserting apply, except that community property laws shall be disregarded for purposes of determining ownership . The amendments made by this section shall apply to plan years beginning after December 31, 2023.