Business Start-up Savings Account as of the date of death, and (B) an amount equal to the fair market value of the assets in such account on such date shall be includible— (i) in the case of a person who is not the estate of such beneficiary, in such person’s gross income for the taxable year which includes such date, or (ii) in the case of a person who is the estate of such beneficiary, in such beneficiary’s gross income for the last taxable year of such beneficiary. (C) Special rules (i) Reduction of inclusion for predeath expenses The amount includible in gross income under subparagraph (B) shall be reduced by the amounts described in paragraph (2) which were incurred by the decedent before the date of the decedent’s death and paid by such person within 1 year after such date. (ii) Deduction for estate taxes An appropriate deduction shall be allowed under section 691(c) to any person (other than the decedent) with respect to amounts included in gross income under clause (i) by such person. (4) Mandatory distribution rules not to apply Section 401(a)(9)(A) and the incidental death benefit requirements of section 401(a) shall not apply to any Small Business Start-up Savings Account. . (b) Excess contributions Section 4973 of such Code is amended by adding at the end the following new subsection: (i) Excess contributions to Small Business Start-Up Savings Accounts For purposes of this section, in the case of contributions to all Small Business Start-up Savings Accounts (within the meaning of section 408B(b)) maintained for the benefit of an individual, the term excess contributions means the sum of— (1) the excess (if any) of— (A) the amount contributed to such accounts for the taxable year, over (B) the amount allowable as a contribution under section 408B(c)(2)(A) for such taxable year, and (2) the amount determined under this subsection for the preceding taxable year, reduced by the sum of— (A) the distributions out of the accounts for the taxable year, and (B) the excess (if any) of— (i) the maximum amount