A Bill to amend the Internal Revenue Code of 1954 to exempt from Federal income taxation a trust established by a taxpayer for the purpose of providing care for certain mentally and physically incompetent relatives of the taxpayer, and for other purposes.

Amends the Internal Revenue Code to exempt from taxation the income of certain trusts established solely to care for mentally or physically handicapped relatives. Provides that distributions from such trusts which are paid to another individual for the care and maintenance of the trust beneficiary shall be excludable from the gross income of such beneficiary.

Permits a deduction from the gross estate of the grantor of a trust for a mentally or physically handicapped relative an amount equal to the interest which such grantor holds in the trust.