Page:United States Statutes at Large Volume 76.djvu/864

 816

68A Stat. 138; °26usc"o4.

intra.

PUBLIC LAW 87-792-OCT. 10, 1%2

[76 STAT.

any contribution made on behalf of any owner-employee which (without regard to this subsection) is not deductible Under section 404 (determined without regard to section 404 (^) (10)) foi* the taxable year; or " (B) if, in the taxable year, contributions are made under the plan on behalf of employees other than owneremployees— "(i) the amount of any contribution made by the employer on behalf of any owner-employee which (without regard to this subsection) is not deductible under section 404 (determined without regard to section 404(a) (10)) for the taxable year; "(ii) the amount of any contribution made by any owner-employee (as an employee) at a rate which exceeds the rate of contributions permitted to be made by employees other than owner-employees; "(iii) the amount of any contribution made by any owner-employee (as an einployee) which exceeds the lesser of $2,500 or 10 percent of the earned income for such taxable year derived by such owner-employee from the trade or business with respect to which the plan is established; and "(iv) in the case of any individual on whose behalf contributions are made under more than one plan as an owner-employee, the amount of any contribution made by such owner-employee (as an employee) under all such plans which exceeds $2,500; and " (C) the amount of any contribution made on behalf of an owner-employee in any taxable year for which, under paragraph (2)(A) or (E), the plan does not (for purposes of section 404) meet the requirements of subsection (d) with respect to such owner-employee. For purposes of this subsection, the amount of any contribution v.hich is allocable (determined in accordance with regulations prescribed by the Secretary or his delegate) to the purchase of life, accident, health, or other insurance shall not be taken into account. "(2)

E F F E C T OF EXCESS CONTRIBUTION.—

" (A) IN GENERAL.—If an excess contribution (other than an excess contribution to which subparagraph (E) applies) is made on behalf of an owner-employee in any taxable year, the plan with respect to which such excess contribution is made shall, except as provided in subparagraphs (C) and (D), be considered, for purposes of section 404, as not meeting the requirements of subsection (d) with respect to such owner-employee for the taxable year and for all succeeding taxable years. "(B)

INCLUSION OF AMOUNTS I N GROSS INCOME OF OWNER-

EMPLOYEES.—For any taxable year for which any plan does not meet the requirements of subsection (d) with respect to an owner-employee by reason of subparagraph (A), the gross income of such owner-employee shall, for purposes of this chapter, include the amount of net income for such taxable year attributable to the interest of such owner-employee under such plan. "(C)

REPAYMENT WITHIN PRESCRIBED PERIOD.—Subpara-

graph (A) shall not apply to an excess contribution with respect to any taxable year, if, on or before the close of the 6-month period beginning on the da^ on which the Secretary or his delegate sends notice (by certified or registered mail)

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