Page:United States Statutes at Large Volume 68A.djvu/374

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INTERNAL REVENUE CODE OF 1954

Subchapter Q—Readjustment of Tax Between Years and Special Limitations Part I. Income attributable to several taxable years. Part II. Mitigation of effect of limitations and other provisions. Part III. Involuntary liquidation and replacement of LIFO inventories. Part IV. War loss recoveries. Part V. Claim of right. Part VI. Other limitations.

PART I—INCOME ATTRIBUTABLE TO SEVERAL TAXABLE YEARS Sec. Sec. Sec. Sec.

1301. 1302. 1303. 1304.

Compensation from an employment. Income from an invention or artistic work. Income from back pay. Rules applicable to this part

SEC. 1301. COMPENSATION FROM AN EMPLOYMENT. (a) LIMITATION ON T A X. — I f an individual or partnership—

(1) engages in an employment as defined in subsection (b); and (2) the employment covers a period of 36 months or more (from the beginning to the completion of such employment); and (3) the gross compensation from the employment received or accrued in the taxable year of the individual or partnership is not less than 80 percent of the total compensation from such employment, then the tax attributable to any part of the compensation which is included in the gross income of any individual shall not be greater than the aggregate of the taxes attributable to such part had it been included in the gross income of such individual ratably over that part of the period which precedes the date of such receipt or accrual. (b) DEFINITION o r AN EMPLOYMENT.—For purposes of this section, the term "an employment" means an arrangement or series of arrangements for the performance of personal services by an individual or partnership to effect a particular result, regardless of the number of sources from which compensation therefor is obtained. (c) RULE W I T H R E S P E C T TO PARTNERS.—An individual who is a member of a partnership receiving or accruing compensation from an employment of the type described in subsection (a) shall be entitled to the benefits of that subsection only if the individual has been a member of the partnership continuously for a period of 36 months or the period of the employment immediately preceding the receipt or accrual. In such a case the tax attributable to the part of the compensation which is includible in the gross income of the individual shall not be greater than the aggregate of the taxes which would have been attributable to that part had it been included in the gross income of the individual ratably over the period in which it was earned or the period during which the individual continuously was a member of the partnership, whichever period is the shorter. For purposes of § 1301

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