trustee is a bank (as defined in section 408(n)) or another person who demonstrates to the satisfaction of the Secretary that the manner in which that person will administer the trust will be consistent with the requirements of this section or who has so demonstrated with respect to any individual retirement plan. (3) No part of the trust assets will be invested in life insurance contracts. (4) The assets of the trust shall not be commingled with other property except in a common trust fund or common investment fund. (c) Qualified principal residence purchase expenditures For purposes of this section— (1) In general The term qualified principal residence purchase expenditures means, with respect to a designated beneficiary who is a first-time homebuyer— (A) any amount paid toward the purchase price of a principal residence of the beneficiary, (B) any amount required to be paid to settle the purchase of such residence, and (C) any amount required to be paid by the beneficiary to obtain acquisition indebtedness with respect to such residence. (2) Purchase price The term purchase price means the adjusted basis of the residence on the date such residence is purchased. (d) Tax treatment (1) Distributions (A) In general If distributions from a first-time homebuyer account for the taxable year do not exceed the qualified principal residence purchase expenditures of the designated beneficiary for the taxable year, no amount shall be includible in gross income. (B) Distributions in excess of expenditures If such distributions exceed such expenditures for the taxable year, such distributions shall be includible in the gross income of the distributee in the manner as provided in section 72 (to the extent not excluded from gross income under any other provision of this chapter), reduced by an amount which bears the same ratio to the amount otherwise so includible as such expenses bear to such distributions. (C) Additional tax for distributions not used for first-time homebuyer purposes (i) In general The tax imposed by this