Page:United States Statutes at Large Volume 68A.djvu/62

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INTERNAL REVENUE CODE OF 1954 (3) CROSS REFERENCE.— For certain rules for determining whether amounts contributed by employer are includible in the gross income of the employee, see part I of subchapter D (sec. 401 and following, relating to pension, profitsharing, and stock bonus plans, etc.)> (e) AMOUNTS N O T R E C E IV E D AS A N N U I T I E S. — (1) GENERAL RULE.—If any amount is received

under an annuity, endowment, or life insurance contract, if such amount is not received as an annuity, and if no other provision of this subtitle applies, then such amount— (A) if received on or after the annuity starting date, shall be included in gross income; or (B) if subparagraph (A) does not apply, shall be included in gross income, but only to the extent that it (when added to amounts previously received under the contract which were excludable from gross income under this subtitle or prior income tax laws) exceeds the aggregate premiums or other consideration paid. For purposes of this section, any amount received which is in the nature of a dividend or similar distribution shall be treated as an amount not received as an annuity. (2) SPECIAL RULES FOR APPLICATION OF PARAGRAPH (i).—For purposes of paragraph (1), the following shall be treated as amounts not received as an annuity: (A) any amount received, whether in a single sum or otherwise, under a contract in full discharge of the obligation under the contract which is in the nature of a refund of the consideration paid for the contract; and (B) any amount received under a contract on its surrender, redemption, or maturity. I n the case of any amount to which the preceding sentence applies, the rule of paragraph (1)(B) shall apply (and the rule of paragraph (1)(A) shall not apply). (3) L I M I T ON TAX ATTRIBUTABLE TO RECEIPT OF LUMP SUM.—If a

lump sum is received under an annuity, endowment, or life insurance contract, and the part which is includible in gross income is determined under paragraph (1), then the tax attributable to the inclusion of such part in gross income for the taxable year shall not be greater than the aggregate of the taxes attributable to such part had it been included in the gross income of the taxpayer ratably over the taxable year in which received and the preceding 2 taxable years. (f)

SPECIAL RULES FOR COMPUTING EMPLOYEES' CONTRIBUTIONS.—

In computing, for purposes of subsection (c)(1)(A), the aggregate amount of premiums or other consideration paid for the contract, for purposes of subsection (d)(1), the consideration for the contract contributed by the employee, and for purposes of subsection (e)(1) (B), the aggregate premiums or other consideration paid, amounts contributed by the employer shall be included, but only to the extent that— (1) such amounts were includible in the gross income of the employee under this subtitle or prior income tax laws; or § 72(d)(3)

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