Page:United States Statutes at Large Volume 102 Part 4.djvu/507

 PUBLIC LAW 100-647—NOV. 10, 1988

102 STAT. 3477

(B) by inserting "with respect to an employee" after "receives". (3) Section 1124 of the Reform Act is amended by adding at the end thereof the following new subsection: "(c) LUMP SUM DISTRIBUTION.—For purposes of this section, the term 'lump sum distribution' has the meaning given such term by section 402(e)(4)(A) of the Internal Revenue Code of 1986, without regard to subparagraph (B) or (H) of section 402(e)(4) of such Code." (e) AMENDMENTS RELATED TO SECTION 1131 OF THE REFORM ACT.—

(1) Subsection (c) of section 4972 of the 1986 Code (defining nondeductible contributions) is amended to read as follows: "(c) NONDEDUCTIBLE CONTRIBUTIONS.—For purposes of this section— "(1) IN GENERAL.—The term 'nondeductible contributions' means, with respect to any qualified employer plan, the sum of— "(A) the excess (if any) of— "(i) the amount contributed for the taxable year by the employer to or under such plan, over "(ii) the amount allowable as a deduction under section 404 for such contributions (determined without regard to subsection (e) thereof), and "(B) the amount determined under this subsection for the preceding taxable year reduced by the sum of— "(i) the portion of the amount so determined returned to the employer during the taxable year, and "(ii) the portion of the amount so determined deductible under section 404 for the taxable year (determined without r^ard to subsection (e) thereof). "(2) ORDERING RULE FOR SECTION 404.—For purposes of paragraph (1), the amount allowable as a deduction under section 404 for any taxable year shall be treated as— "(A) first from carryforwards to such taxable year from preceding taxable years (in order of time), and "(B) then from contributions made during such taxable year. "(3) CONTRIBUTIONS wracH MAY BE RETURNED TO EMPLOYER.—

In determining the amount of nondeductible contributions for any taxable year, there shall not be taken into account any contribution for such taxable year which is distributed to the employer in a distribution described in section 4980(c)(2)(B)(ii) if such distribution is made on or before the last day on which a contribution may be made for such taxable year under section 404(a)(6). "(4) PRE-1987 CONTRIBUTIONS.—The term 'nondeductible contribution' shall not include any contribution made for a taxable year beginning before January 1, 1987." (2) Paragraph (1) of section 4972(d) of the 1986 Code (defining qualified employer plan) is amended to read as follows: "(1) QUALIFIED EMPLOYER PLAN.—

"(A) IN GENERAL.—The term 'qualified employer plan* means— "(i) any plan meeting the requirements of section 401(a) which includes a trust exempt from tax under section 501(a), "(ii) an annuity plan described in section 403(a), and

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