PUBLIC LAW 105-33 —AUG. 5, 1997 111 STAT. 333 "(C) SPECIAL RULES.— For purposes of subparagraph (A)- "(i) all Medicare+Choice MSAs of the account holder shall be treated as 1 account, "(ii) all payments and distributions not used exclusively to pay the qualified medical expenses of the account holder during any taxable year shall be treated as 1 distribution, and "(iii) any distribution of property shall be taken into accoiuit at its fair market value on the date of the distribution. "(3) WITHDRAWAL OF ERRONEOUS CONTRIBUTIONS.— Section 220(f)(2) and paragraph (2) of this subsection shall not apply to any payment or distribution from a Medicare+Choice MSA to the Secretary of Health and Human Services of an erroneous contribution to such MSA and of the net income attributable to such contribution. "(4) TRUSTEE-TO-TRUSTEE TRANSFERS. —Section 220(f)(2) and paragraph (2) of this subsection shall not apply to any trustee-to-trustee transfer from a Medicare+Choice MSA of an account holder to another Mediceire+Choice MSA of such account holder. "(d) SPECIAL RULES FOR TREATMENT OF ACCOUNT AFTER DEATH Applicability. OF ACCOUNT HOLDER.— In applying section 220(f)(8)(A) to an account which was a Medicare+Choice MSA of a decedent, the rules of section 220(f) shall apply in lieu of the rules of subsection (c) of this section with respect to the spouse as the account holder of such Medicare+Choice MSA. "(e) REPORTS. —In the case of a Medicare+Choice MSA, the report under section 220(h)— "(1) shall include the fair market value of the assets in such Medicare+Choice MSA as of the close of each calendar year, and "(2) shall be furnished to the account holder— "(A) not later than January 31 of the calendar year following the calendar year to which such reports relate, and "(B) in such manner as the Secretary prescribes in such regulations. "(f) COORDINATION WITH LIMITATION ON NUMBER OF TAXPAYERS HAVING MEDICAL SAVINGS ACCOUNTS. —Subsection (i) of section 220 shall not apply to an individual with respect to a Medicare+Choice MSA, and Medicare+Choice MSA's shall not be taken into account in determining whether the numerical limitations under section 2200") are exceeded.". (b) TECHNICAL AMENDMENTS.— (1) The last sentence of section 4973(d) of such Code is 26 USC 4973. amended by inserting "or section 138(c)(3)" after "section 220(f)(3)". (2) Subsection (b) of section 220 of such Code is amended 26 USC 220. by adding at the end the following new paragraph: "(7) MEDICARE ELIGIBLE INDIVIDUALS.— The limitation under this subsection for any month with respect to an individual shall be zero for the first month such individual is entitled to benefits under title XVIII of the Social Security Act and for each month thereafter.".
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