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Internal Revenue Code of 1986

The main body of law in the United States that governs federal income taxation.

Tax-Exempt

Meaning that certain income, earnings, or assets are not subject to federal income tax.

Unrelated Business Income

Income that a tax-exempt organization (like a charity) earns from a business activity that is not directly related to its main tax-exempt purpose. Such income may still be taxable.

Rollover Contribution

Moving money from one tax-advantaged savings account to another similar account without it being counted as a taxable withdrawal or new contribution.

Nonforfeitable

A legal term meaning that an individual's right to their account balance or assets is fully vested and cannot be taken away or lost.

Custodial Account

A type of financial account where a 'custodian' (often a bank or brokerage firm) holds assets on behalf of a beneficiary. In this bill, it can function similarly to a trust for a USA.

Cost-of-Living Adjustment

An increase to certain dollar amounts (like contribution limits) to keep pace with inflation, maintaining their purchasing power over time.