I
119THCONGRESS
1
STSESSION H. R. 440
To amend the Internal Revenue Code of 1986 to provide for Residential
Emergency Asset-accumulation Deferred Taxation Yield (READY) accounts.
IN THE HOUSE OF REPRESENTATIVES
JANUARY15, 2025
Ms. L
EEof Florida (for herself, Mr. MOSKOWITZ, Mr. BUCHANAN, and Mr.
S
COTTFRANKLINof Florida) introduced the following bill; which was re-
ferred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide
for Residential Emergency Asset-accumulation Deferred
Taxation Yield (READY) accounts.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘READY Accounts 4
Act’’. 5
SEC. 2. READY ACCOUNTS. 6
(a) I
NGENERAL.—Part VII of subchapter B of chap-7
ter 1 of the Internal Revenue Code of 1986 is amended 8
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by redesignating section 224 as section 225 and by insert-1
ing after section 223 the following new section: 2
‘‘SEC. 224. RESIDENTIAL EMERGENCY ASSET-ACCUMULA-3
TION DEFERRED TAXATION YIELD (READY) 4
ACCOUNTS. 5
‘‘(a) D
EDUCTIONALLOWED.—In the case of an indi-6
vidual, there shall be allowed as a deduction for the tax-7
able year an amount equal to the aggregate amount paid 8
in cash during such taxable year by or on behalf of such 9
individual to a Residential Emergency Asset-accumulation 10
Deferred Taxation Yield (READY) account such indi-11
vidual. 12
‘‘(b) L
IMITATION.— 13
‘‘(1) I
N GENERAL.—The amount allowable as a 14
deduction under subsection (a) to an individual for 15
the taxable year shall not exceed $4,500. 16
‘‘(2) I
NFLATION ADJUSTMENT .— 17
‘‘(A) I
N GENERAL.—In the case of any 18
taxable year beginning in a calendar year after 19
2025, the $4,500 dollar amount under para-20
graph (1) shall be increased by an amount 21
equal to— 22
‘‘(i) such dollar amount, multiplied by 23
‘‘(ii) the cost-of-living adjustment de-24
termined under section 1(f)(3) for the cal-25
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endar year in which the taxable year be-1
gins, determined by substituting in sub-2
paragraph (A)(ii) thereof ‘calendar year 3
2024’ for ‘calendar year 2016’. 4
‘‘(B) R
OUNDING.—If any amount as ad-5
justed under paragraph (1) is not a multiple of 6
$50, such dollar amount shall be rounded to the 7
next lowest multiple of $50. 8
‘‘(c) R
ESIDENTIALEMERGENCYASSET-ACCUMULA-9
TIONDEFERRED TAXATIONYIELD(READY) AC-10
COUNT.—For purposes of this section— 11
‘‘(1) I
N GENERAL.—The term ‘Residential 12
Emergency Asset-accumulation Deferred Taxation 13
Yield (READY) account’ means a trust created or 14
organized in the United States as a Residential 15
Emergency Asset-accumulation Deferred Taxation 16
Yield (READY) account exclusively for the purpose 17
of paying the qualified home disaster mitigation and 18
recovery expenses of the account beneficiary, but 19
only if the written governing instrument creating the 20
trust meets the following requirements: 21
‘‘(A) Except in the case of a rollover con-22
tribution described in subsection (e)(5), no con-23
tribution will be accepted— 24
‘‘(i) unless it is in cash, or 25
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‘‘(ii) to the extent such contribution, 1
when added to previous contributions to 2
the trust for the calendar year, exceeds the 3
dollar amount in effect under subsection 4
(b)(1). 5
‘‘(B) The trustee is a bank (as defined in 6
section 408(n)) or another person who dem-7
onstrates to the satisfaction of the Secretary 8
that the manner in which such person will ad-9
minister the trust will be consistent with the re-10
quirements of this section. 11
‘‘(C) No part of the trust assets will be in-12
vested in life insurance contracts. 13
‘‘(D) The assets of the trust will not be 14
commingled with other property except in a 15
common trust fund or common investment 16
fund. 17
‘‘(E) The interest of an individual in the 18
balance in his account is nonforfeitable. 19
‘‘(2) Q
UALIFIED HOME DISASTER MITIGATION 20
AND RECOVERY EXPENSES .— 21
‘‘(A) I
N GENERAL.—The term ‘qualified 22
home disaster mitigation and recovery expenses’ 23
means, with respect to an account beneficiary, 24
amounts paid by such beneficiary for— 25
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‘‘(i) qualified disaster mitigation 1
measures, or 2
‘‘(ii) qualified disaster recovery costs, 3
with respect to a qualified home of the tax-4
payer. 5
‘‘(B) Q
UALIFIED DISASTER MITIGATION 6
MEASURES.—For purposes of subparagraph 7
(A)— 8
‘‘(i) I
N GENERAL.—The term ‘quali-9
fied disaster mitigation measures’ means 10
any measure described in clause (ii) with 11
respect to a qualified home of the taxpayer 12
if— 13
‘‘(I) such measure meets such 14
criteria as the Secretary, in consulta-15
tion with the Administrator of the 16
Federal Emergency Management 17
Agency, considers appropriate to miti-18
gate damage from a natural or other 19
disaster, and 20
‘‘(II) is certified by a qualified 21
industry professional as meeting such 22
criteria. 23
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‘‘(ii) MITIGATION MEASURES .—The 1
following measures are measures described 2
in this clause: 3
‘‘(I) Installing a roofing 4
underlayment to sheathing. 5
‘‘(II) Replacing a roof covering. 6
‘‘(III) Applying a foam adhesive 7
to reinforce the roof structure. 8
‘‘(IV) Strengthening connection 9
of roof deck to roof framing. 10
‘‘(V) Strengthening roof-to-wall 11
connections. 12
‘‘(VI) Strengthening soffits. 13
‘‘(VII) Strengthening attic ven-14
tilation openings. 15
‘‘(VIII) Installing impact-resist-16
ant windows. 17
‘‘(IX) Installing impact-resistant 18
entry doors. 19
‘‘(X) Elevating the residential 20
home. 21
‘‘(XI) Installing ground anchors. 22
‘‘(XII) If the qualified home was 23
built according to a building code 24
from a prior year, achieving the cur-25
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rent building code standard in the ap-1
plicable State or locality. 2
‘‘(XIII) Such other measures de-3
termined by the Secretary, in con-4
sultation with the Administrator of 5
the Federal Emergency Management 6
Agency, to be consistent with the pur-7
poses of this section. 8
‘‘(iii) Q
UALIFIED INDUSTRY PROFES -9
SIONAL.—The term ‘qualified industry pro-10
fessional’ means an individual who meets 11
such rules and standards as determined 12
appropriate by the Secretary, in consulta-13
tion with the Administrator of the Federal 14
Emergency Management Agency. 15
‘‘(C) Q
UALIFIED DISASTER RECOVERY 16
COSTS.—For purposes of subparagraph (A), the 17
term ‘qualified disaster recovery costs’ means 18
costs for repairing damage to the qualified 19
home of the taxpayer if such damage arises 20
from fire, storm, or other casualty and such 21
costs are not compensated for by insurance or 22
otherwise. 23
‘‘(D) Q
UALIFIED HOME.—For purposes of 24
this section, the term ‘qualified home’ means, 25
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with respect to any taxable year, any structure 1
which is— 2
‘‘(i) owned by the taxpayer, and 3
‘‘(ii) used by the taxpayer as the tax-4
payer’s principal residence (within the 5
meaning of section 121) for the taxable 6
year. 7
‘‘(3) A
CCOUNT BENEFICIARY .—The term ‘ac-8
count beneficiary’ means the individual on whose be-9
half the Residential Emergency Asset-accumulation 10
Deferred Taxation Yield (READY) account was es-11
tablished. 12
‘‘(4) C
ERTAIN RULES TO APPLY .—Rules similar 13
to the following rules shall apply for purposes of this 14
section: 15
‘‘(A) Section 219(d)(2) (relating to no de-16
duction for rollovers). 17
‘‘(B) Section 219(f)(3) (relating to time 18
when contributions deemed made). 19
‘‘(C) Section 219(f)(5) (relating to em-20
ployer payments). 21
‘‘(D) Section 408(g) (relating to commu-22
nity property laws). 23
‘‘(E) Section 408(h) (relating to custodial 24
accounts). 25
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‘‘(d) TAXTREATMENT OFACCOUNTS.— 1
‘‘(1) I
N GENERAL.—A Residential Emergency 2
Asset-accumulation Deferred Taxation Yield 3
(READY) account is exempt from taxation under 4
this subtitle unless such account has ceased to be a 5
Residential Emergency Asset-accumulation Deferred 6
Taxation Yield (READY) account. Notwithstanding 7
the preceding sentence, any such account is subject 8
to the taxes imposed by section 511 (relating to im-9
position of tax on unrelated business income of char-10
itable, etc. organizations). 11
‘‘(2) A
CCOUNT TERMINATIONS .—Rules similar 12
to the rules of paragraphs (2) and (4) of section 13
408(e) shall apply to Residential Emergency Asset- 14
accumulation Deferred Taxation Yield (READY) ac-15
counts, and any amount treated as distributed under 16
such rules shall be treated as not used to pay quali-17
fied home disaster mitigation and recovery expenses. 18
‘‘(e) T
AXTREATMENT OFDISTRIBUTIONS.— 19
‘‘(1) A
MOUNTS USED FOR QUALIFIED HOME 20
DISASTER MITIGATION AND RECOVERY EXPENSES .— 21
Any amount paid or distributed out of a Residential 22
Emergency Asset-accumulation Deferred Taxation 23
Yield (READY) account which is used exclusively to 24
pay qualified home disaster mitigation and recovery 25
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expenses of the account beneficiary shall not be in-1
cludible in gross income. 2
‘‘(2) I
NCLUSION OF AMOUNTS NOT USED FOR 3
QUALIFIED HOME DISASTER MITIGATION AND RE -4
COVERY EXPENSES .—Any amount paid or distrib-5
uted out of a Residential Emergency Asset-accumu-6
lation Deferred Taxation Yield (READY) account 7
which is not used exclusively to pay the qualified 8
home disaster mitigation and recovery expenses of 9
the account beneficiary shall be included in the gross 10
income of such beneficiary. 11
‘‘(3) E
XCESS CONTRIBUTIONS RETURNED BE -12
FORE DUE DATE OF RETURN .— 13
‘‘(A) I
N GENERAL.—If any excess con-14
tribution is contributed for a taxable year to 15
any Residential Emergency Asset-accumulation 16
Deferred Taxation Yield (READY) account of 17
an individual, paragraph (2) shall not apply to 18
distributions from the Residential Emergency 19
Asset-accumulation Deferred Taxation Yield 20
(READY) accounts of such individual (to the 21
extent such distributions do not exceed the ag-22
gregate excess contributions to all such ac-23
counts of such individual for such year) if— 24
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‘‘(i) such distribution is received by 1
the individual on or before the last day 2
prescribed by law (including extensions of 3
time) for filing such individual’s return for 4
such taxable year, and 5
‘‘(ii) such distribution is accompanied 6
by the amount of net income attributable 7
to such excess contribution. 8
Any net income described in clause (ii) shall be 9
included in the gross income of the individual 10
for the taxable year in which it is received. 11
‘‘(B) E
XCESS CONTRIBUTION .—For pur-12
poses of subparagraph (A), the term ‘excess 13
contribution’ means any contribution (other 14
than a rollover contribution described in para-15
graph (5)) which is not deductible under this 16
section. 17
‘‘(4) A
DDITIONAL TAX ON DISTRIBUTIONS NOT 18
USED FOR QUALIFIED HOME DISASTER MITIGATION 19
AND RECOVERY EXPENSES .—The tax imposed by 20
this chapter on the account beneficiary for any tax-21
able year in which there is a payment or distribution 22
from a Residential Emergency Asset-accumulation 23
Deferred Taxation Yield (READY) account of such 24
beneficiary which is includible in gross income under 25
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paragraph (2) shall be increased by 20 percent of 1
the amount which is so includible. 2
‘‘(5) R
OLLOVER CONTRIBUTION .—An amount is 3
described in this paragraph as a rollover contribu-4
tion if it meets the requirements of subparagraphs 5
(A) and (B). 6
‘‘(A) I
N GENERAL.—Paragraph (2) shall 7
not apply to any amount paid or distributed 8
from a Residential Emergency Asset-accumula-9
tion Deferred Taxation Yield (READY) account 10
to the account beneficiary to the extent the 11
amount received is paid into a Residential 12
Emergency Asset-accumulation Deferred Tax-13
ation Yield (READY) account for the benefit of 14
such beneficiary not later than the 60th day 15
after the day on which the beneficiary receives 16
the payment or distribution. 17
‘‘(B) L
IMITATION.—This paragraph shall 18
not apply to any amount described in subpara-19
graph (A) received by an individual from a Res-20
idential Emergency Asset-accumulation De-21
ferred Taxation Yield (READY) account if, at 22
any time during the 1-year period ending on the 23
day of such receipt, such individual received any 24
other amount described in subparagraph (A) 25
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from a Residential Emergency Asset-accumula-1
tion Deferred Taxation Yield (READY) account 2
which was not includible in the individual’s 3
gross income because of the application of this 4
paragraph. 5
‘‘(6) T
RANSFER OF ACCOUNT INCIDENT TO DI -6
VORCE.—The transfer of an individual’s interest in 7
a Residential Emergency Asset-accumulation De-8
ferred Taxation Yield (READY) account to an indi-9
vidual’s spouse or former spouse under a divorce or 10
separation instrument described in clause (i) of sec-11
tion 121(d)(3)(C) shall not be considered a taxable 12
transfer made by such individual notwithstanding 13
any other provision of this subtitle, and such interest 14
shall, after such transfer, be treated as a Residential 15
Emergency Asset-accumulation Deferred Taxation 16
Yield (READY) account with respect to which such 17
spouse is the account beneficiary. 18
‘‘(7) T
REATMENT AFTER DEATH OF ACCOUNT 19
BENEFICIARY.— 20
‘‘(A) T
REATMENT IF DESIGNATED BENE -21
FICIARY IS SPOUSE .—If the account bene-22
ficiary’s surviving spouse acquires such bene-23
ficiary’s interest in a Residential Emergency 24
Asset-accumulation Deferred Taxation Yield 25
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(READY) account by reason of being the des-1
ignated beneficiary of such account at the death 2
of the account beneficiary, such Residential 3
Emergency Asset-accumulation Deferred Tax-4
ation Yield (READY) account shall be treated 5
as if the spouse were the account beneficiary. 6
‘‘(B) O
THER CASES.—If, by reason of the 7
death of the account beneficiary, any person ac-8
quires the account beneficiary’s interest in a 9
Residential Emergency Asset-accumulation De-10
ferred Taxation Yield (READY) account in a 11
case to which subparagraph (A) does not 12
apply— 13
‘‘(i) such account shall cease to be a 14
Residential Emergency Asset-accumulation 15
Deferred Taxation Yield (READY) ac-16
count as of the date of death, and 17
‘‘(ii) an amount equal to the fair mar-18
ket value of the assets in such account on 19
such date shall be includible if such person 20
is not the estate of such beneficiary, in 21
such person’s gross income for the taxable 22
year which includes such date, or if such 23
person is the estate of such beneficiary, in 24
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such beneficiary’s gross income for the last 1
taxable year of such beneficiary. 2
‘‘(f) R
EPORTS.— 3
‘‘(1) I
N GENERAL.—The Secretary may require 4
the trustee of a Residential Emergency Asset-accu-5
mulation Deferred Taxation Yield (READY) account 6
to make such reports regarding such account to the 7
Secretary and to the account beneficiary with re-8
spect to contributions, distributions, the return of 9
excess contributions, and such other matters as the 10
Secretary determines appropriate. 11
‘‘(2) T
IME AND MANNER OF REPORTS .—The re-12
ports required by this subsection shall be filed at 13
such time and in such manner and furnished to such 14
individuals at such time and in such manner as may 15
be required by the Secretary. 16
‘‘(g) R
EGULATIONS.— The Secretary shall prescribe 17
such regulations as may be necessary or appropriate to 18
carry out the purposes of this section and to prevent the 19
abuse of such purposes.’’. 20
(b) E
XCESSCONTRIBUTIONS.— 21
(1) I
N GENERAL.—Section 4973(a) of the In-22
ternal Revenue Code of 1986 is amended by striking 23
‘‘or’’ at the end of paragraph (5), by inserting ‘‘or’’ 24
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at the end of paragraph (6), and by inserting after 1
paragraph (6) the following new paragraph: 2
‘‘(7) a Residential Emergency Asset-accumula-3
tion Deferred Taxation Yield (READY) account 4
(within the meaning of section 224),’’. 5
(2) E
XCESS CONTRIBUTIONS .—Section 4973 of 6
such Code is amended by adding at the end the fol-7
lowing new subsection: 8
‘‘(i) E
XCESSCONTRIBUTIONS TO READY AC-9
COUNTS.— 10
‘‘(1) I
N GENERAL.—For purposes of this sec-11
tion, in the case of a Residential Emergency Asset- 12
accumulation Deferred Taxation Yield (READY) ac-13
count (within the meaning of section 224), the term 14
‘excess contributions’ means the sum of— 15
‘‘(A) the aggregate amount contributed for 16
the taxable year to such accounts (other than 17
rollover contributions described in section 18
224(e)(5)) which is not allowed as a deduction 19
under section 224 fo such year, and, and 20
‘‘(B) the amount determined under this 21
subsection for the preceding taxable year, re-22
duced by the sum of— 23
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‘‘(i) the distributions out of the ac-1
counts which were included in gross in-2
come under section 224(e)(2), and 3
‘‘(ii) the excess (if any) of the max-4
imum amount allowed as a deduction 5
under section 224(b) for the taxable year 6
over the amount contributed to the ac-7
counts for the taxable year. 8
‘‘(2) S
PECIAL RULES.—For purposes of this 9
subsection, any contribution which is distributed out 10
of the Residential Emergency Asset-accumulation 11
Deferred Taxation Yield (READY) account in a dis-12
tribution to which section 223(e)(3) applies shall be 13
treated as an amount not contributed.’’. 14
(c) A
PPLICATION OF PROHIBITEDTRANSACTION 15
R
ULES.— 16
(1) I
N GENERAL.—Section 4975(e)(1) of the 17
Internal Revenue Code of 1986 is amended by strik-18
ing ‘‘or’’ at the end of subparagraph (F), by redesig-19
nating subparagraph (G) as subparagraph (H), and 20
by inserting after subparagraph (F) the following 21
new subparagraph: 22
‘‘(G) a Residential Emergency Asset-accu-23
mulation Deferred Taxation Yield (READY) ac-24
count described in section 224, or’’. 25
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(2) SPECIAL RULE.—Section 4975(c) of such 1
Code is amended by adding at the end the following 2
new paragraph: 3
‘‘(8) S
PECIAL RULE FOR RESIDENTIAL EMER -4
GENCY ASSET-ACCUMULATION DEFERRED TAXATION 5
YIELD (READY) ACCOUNTS .—An individual for whose 6
benefit a Residential Emergency Asset-accumulation 7
Deferred Taxation Yield (READY) account (within 8
the meaning of section 224) is established shall be 9
exempt from the tax imposed by this section with re-10
spect to any transaction concerning such account 11
(which would otherwise be taxable under this sec-12
tion) if, with respect to such transaction, the ac-13
count ceases to be a Residential Emergency Asset- 14
accumulation Deferred Taxation Yield (READY) ac-15
count by reason of the application of section 16
224(d)(2) to such account.’’. 17
(d) C
ONFORMINGAMENDMENTS.— 18
(1) Section 26(b)(2) of the Internal Revenue 19
Code of 1986 is amended by striking ‘‘and’’ at the 20
end of subparagraph (Y), by striking the period at 21
the end of subparagraph (Z) and inserting ‘‘, and’’, 22
and by inserting after subparagraph (Y) the fol-23
lowing: 24
‘‘(AA) section 224(e)(4).’’. 25
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(2) Section 62(a) of such Code is amended by 1
inserting after paragraph (21) the following new 2
paragraph: 3
‘‘(22) R
ESIDENTIAL EMERGENCY ASSET -ACCU-4
MULATION DEFERRED TAXATION YIELD (READY) AC -5
COUNT.—The deduction allowed by section 224.’’. 6
(3) Section 165(h) of such Code is amended by 7
adding at the end the following new paragraph: 8
‘‘(6) C
OORDINATION WITH EXPENDITURES 9
FROM READY ACCOUNTS .—No deduction shall be al-10
lowed with respect to any loss described in sub-11
section (a)(3) to the extent the taxpayer has made 12
an expenditure from a Residential Emergency Asset- 13
accumulation Deferred Taxation Yield (READY) ac-14
count (as defined in section 224) which is taken into 15
account under section 224(c)(2)(C) as a cost with 16
respect to such loss.’’. 17
(4) Section 877A of such Code is amended— 18
(A) in subsection (e)(2) by inserting ‘‘a 19
Residential Emergency Asset-accumulation De-20
ferred Taxation Yield (READY) account (as de-21
fined in section 224),’’ after ‘‘a health savings 22
account (as defined in section 223),’’, and 23
(B) in subsection (g)(6) by inserting 24
‘‘224(e)(4),’’ after ‘‘223(f)(4),’’. 25
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(5) Section 6693(a)(2) of such Code is amended 1
by striking ‘‘and’’ at the end of subparagraph (E), 2
by striking the period at the end of subparagraph 3
(F) and inserting ‘‘, and’’, and by inserting after 4
subparagraph (F) the following new subparagraph: 5
‘‘(G) section 224(f) (relating to Residential 6
Emergency Asset-accumulation Deferred Tax-7
ation Yield (READY) accounts).’’. 8
(6) The table of sections for part VII of sub-9
chapter B of chapter 1 of such Code is amended re-10
designating the item relating to section 224 as relat-11
ing to section 225 and by inserting after the item 12
relating to section 223 the following new item: 13
‘‘Sec. 224. Residential Emergency Asset-accumulation Deferred Taxation Yield
(READY) accounts.’’.
(e) EFFECTIVEDATE.—The amendments made by 14
this section shall apply to taxable years beginning after 15
December 31, 2024. 16
Æ
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