Page:United States Statutes at Large Volume 100 Part 3.djvu/669

 PUBLIC LAW 99-514—OCT. 22, 1986 u

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100 STAT. 2477

sentence of this subparagraph (as in effect on the day before the date of the enactment of the Tax Reform Act of 1986) for any taxable year beginning before January 1, 1987, exceeded the amount paid to the trust for such taxable year (to the extent such excess was not taken into account in prior taxable years)."

(b) COMBINED LIMIT TO APPLY TO COMBINATIONS OF DEFINED CONTRIBUTION PLANS AND DEFINED BENEFIT PLANS.—Paragraph (7) of

section 404(a) is amended to read as follows: "(7) LIMITATION O N DEDUCTIONS WHERE COMBINATION O F DE-

FINED CONTRIBUTION PLAN AND DEFINED BENEFIT PLAN.—

"(A) IN GENERAL.—If amounts are deductible under the foregoing provisions of this subsection (other than paranr I f graph (5)) in connection with 1 or more defined contribution plans and 1 or more defined benefit plans, the total amount deductible in a taxable year under such plans shall not exceed the greater of— ,,. „ "(i) 25 percent of the compensation otherwise paid or ''^ "*" accrued during the taxable year to the beneficiaries ,. ^ ^ under such plans, or -"--"*" " "(ii) the amount of contributions made to or under the defined benefit plans to the extent such contributions do not exceed the amount of employer •' contributions necessary to satisfy the minimum fund^-,, ing standard provided by section 412 with respect to Kk. VI ^j^y such defined benefit plans for the plan year which "" ' -" ends with or within such taxable year (or for any prior plan year), A defined contribution plan which is a pension plan shall •' " not be treated as failing to provide definitely determinable benefits merely by limiting employer contributions to amounts deductible under this section. ^

"(B) CARRYOVER OF CONTRIBUTIONS DEDUCTIBLE LIMIT.—Any amount paid

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IN EXCESS OF THE

under the plans in any taxable year in excess of the limitation of subparagraph (A) shall be deductible in the succeeding taxable years in order of time, but the amount so deductible under this subparagraph in any 1 such succeeding taxable year together with the amount allowable under subparagraph (A) shall not exceed 25 percent of the compensation otherwise paid or accrued during such taxable year to the beneficiaries under the plans. "(C) PARAGRAPH NOT TO APPLY IN CERTAIN CASES.—This

paragraph shall not have the effect of reducing the amount (/7:-*/• otherwise deductible under paragraphs (1), (2), and (3), if no employee is a beneficiary under more than 1 trust or under a trust and an annuity plan, \ "(D) SECTION 4i2(i) PLANS.—For purposes of this paragraph, any plan described in section 412(i) shall be treated as a defined benefit plan." (c) EXCISE TAX ON NONDEDUCTIBLE CONTRIBUTIONS TO QUALIFIED EMPLOYER PLANS,—

(1) IN GENERAL,—Chapter 43 (relating to qualified pension, etc, plans) is amended by inserting after section 4971 the following new section:

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