A bill to amend the Internal Revenue Code of 1954 to provide for the establishment of the deduction of contributions to parents and students' savings accounts for educational purposes.

[AI summary unavailable — showing source text] Amends the Internal Revenue Code to allow an income tax deduction for cash and other personal property contributions to a parents' and students' savings account (PASS) used exclusively for the purpose of paying the educational expenses of the taxpayer or the taxpayer's child. Limits the amount of such deduction to $1,500 per year, adjusted for inflation. Limits eligibility for such deduction to dependents of the taxpayer, to individuals who have not attained age 21, full-time students at eligible educational institutions of higher learning or vocational schools, members of the Armed Forces on active duty, volunteers in the Peace Corps, or full-time volunteers with certain other organizations. Excludes distributions from such an account from the gross income of the payee so long as such distributions are used for the beneficiary's tuition, fees, books and supplies, and reasonable living expenses. Specifies sanctions for the use of account funds for other than educational purposes. Requires the beneficiary of a PASS account to maintain certain records and file certain documents with the Secretary of the Treasury.…