SB70-AA1,1234 Section 1234. 71.05 (6) (b) 57. of the statutes is created to read:

SB70-AA1,562,3 71.05 (6) (b) 57. For each account an account holder, as defined in s. 71.10 (10) (a) 1., creates under s. 71.10 (10) (b) 1., and subject to s. 71.10 (10) (d), the amount deposited, limited to $5,000, by the account holder into the account during the taxable year and any interest, dividends, and other gains that accrue in the account and are redeposited into it. If the account holder is married and files a joint return, the $5,000 limitation shall be increased to $10,000. The subtraction under this subdivision does not apply to the transfer of funds from another account as described in s. 71.10 (10) (c) 4.

SB70-AA1,1235 Section 1235. 71.10 (4) (k) of the statutes is created to read:

SB70-AA1,562,5 71.10 (4) (k) Any amount computed under s. 71.83 (1) (ch).

SB70-AA1,1236 Section 1236. 71.10 (10) of the statutes is created to read:

SB70-AA1,562,8 71.10 (10) First-time home buyer savings accounts. (a) Definitions. In this subsection:

SB70-AA1,562,10 1. “Account holder” means an individual who creates, individually or jointly with his or her spouse, an account under par. (b) 1.

SB70-AA1,562,12 2. “Allowable closing costs” means disbursements listed in a settlement statement for the purchase of a single-family residence by a beneficiary.

SB70-AA1,562,14 3. “Beneficiary" means a first-time home buyer who is designated by an account holder as the beneficiary of an account created under par. (b) 1.

SB70-AA1,562,16 4. “Eligible costs” means the down payment and allowable closing costs for the purchase of a single-family residence in this state by a beneficiary.

SB70-AA1,562,21 5. “Financial institution" means a bank, trust company, savings institution, savings bank, savings and loan association, industrial loan association, consumer finance company, credit union, benefit association, insurance company, safe deposit company, money market mutual fund, or similar entity authorized to do business in this state.

SB70-AA1,562,25 6. “First-time home buyer” means an individual who resides in this state and did not have, either individually or jointly, a present ownership interest in a single-family residence during the 36 months before the month in which the individual purchases a single-family residence in this state.

SB70-AA1,563,3 7. “Single-family residence” means a residence intended for occupation by a single family unit that is purchased by a beneficiary for use as his or her principal residence.

SB70-AA1,563,12 (b) Creation of account. 1. An individual may create an account and become the account holder by opening an account at a financial institution for the purpose of paying or reimbursing the eligible costs of a first-time home buyer. The account holder shall designate a beneficiary when the account is created and may designate himself or herself as the beneficiary. An account may have only one beneficiary at any one time. An individual may be the beneficiary of more than one account, and an individual may be the account holder of more than one account, but an account holder may not have more than one account that designates the same beneficiary. The account holder may change the beneficiary at any time.

SB70-AA1,563,14 2. An individual may jointly own an account created under subd. 1 with his or her spouse.

SB70-AA1,563,16 3. Only cash and marketable securities may be contributed to an account created under subd. 1.

SB70-AA1,563,19 4. Persons other than an account holder may contribute to an account created under subd. 1, but the subtraction under s. 71.05 (6) (b) 57. may be made only by the account holder.

SB70-AA1,563,23 (c) Account holder rights and responsibilities. 1. An account holder may withdraw funds from an account created under par. (b) 1. to pay eligible costs for the benefit of the beneficiary or to reimburse the beneficiary for eligible costs the beneficiary incurs and has paid.

SB70-AA1,564,3 2. An account holder may not use funds in an account created under par. (b) 1. to pay any expenses he or she incurs in administering the account, although a financial institution may deduct a service fee from the account.

SB70-AA1,564,7 3. Annually, an account holder shall submit to the department with his or her income tax return, on forms prepared by the department, information regarding the account created under par. (b) 1. The information submitted shall include all of the following:

SB70-AA1,564,9 a. A list of transactions in the account during the taxable year to which the return relates, including the beginning and ending balances of the account.

SB70-AA1,564,10 b. The 1099 form issued by the financial institution that relates to the account.

SB70-AA1,564,12 c. A list of eligible costs, and other costs, for which funds from the account were withdrawn during the taxable year to which the return relates.

SB70-AA1,564,17 4. An account holder may withdraw funds from an account created under par. (b) 1. with no penalty due under s. 71.83 (1) (ch) and no responsibility to make an addition under s. 71.05 (6) (a) 30. if he or she immediately transfers the funds to a different financial institution and deposits the funds into an account created under par. (b) 1. at that financial institution.

SB70-AA1,564,20 (d) Limitations on accounts, dissolution. 1. An account holder may not claim a subtraction under s. 71.05 (6) (b) 57. for more than a total of $50,000 of deposits into any account created under par. (b) 1. for each beneficiary.

SB70-AA1,564,23 2. An account holder shall dissolve an account created under par. (b) 1. no later than 120 months after it is created. The financial institution shall distribute any funds in the account at dissolution to the account holder.

SB70-AA1,565,3 3. If an account holder dies while funds remain in an account created under par. (b) 1., the account shall be dissolved and the financial institution shall distribute the funds to the account holder's estate.

SB70-AA1,565,4 (e) Department responsibilities. The department shall:

SB70-AA1,565,7 1. Prepare and distribute any forms that an account holder is required to submit under par. (c) 3. and any other forms necessary to administer this subsection and the adjustments to income under s. 71.05 (6) (a) 30. and (b) 57.