Page:United States Statutes at Large Volume 76.djvu/872

 824 26 USC 404.

26 USC 402. Ante, p. 812.
 * 03Poat, p. 825.

PUBLIC LAW 87-792-OCT. 10, 1962

[76 STAT.

" (ii) If deductions have been allowed under section 404 for contributions paid on behalf of the individual while he is an owner-employee for a number of prior taxable years less than 4, clause (i) shall be applied by taking into account a number of taxable years immediately preceding the taxable year in which the amount was so received equal to such lesser number. " (C) I f subparagraph (B) does not apply to a person for the taxable year, the increase in tax of such person for the taxable year attributable to the amounts to which this paragraph applies shall be 110 percent of such increase (computed without regard to this subparagraph). " (D) Subparagraph (A) (ii) of this paragraph shall not apply to any amount to which section 402(a)(2) or 403(a) (2) applies. " (E) For special rules for computation of taxable income for taxable years to which this paragraph applies, see subsection (n)(3). "(6) OWNER-EMPLOYEE DEFINED.—For purposes of this subsection, the term.'owner-employee' has the meaning assigned to it by section 401(c)(3). " (n) TREATMENT OF CERTAIN DISTRIBUTIONS W I T H RESPECT TO CONTRIBUTIONS BY SELF-EMPLOYED iNDIVIDUiVLS. " (1) APPLICATION OF SUBSECTION.— " (A) DISTRIBUTIONS BY EMPI.OYFJS' TRUST.—Subject to the

26 USC 401. 26 USC 501.

72 Stat. 1614. 26 USC 213.

Ante, p. 811.

provisions of subparagraph (C), this subsection shall apply to amounts distributed to a distributee, in the case oi an employees' triist described in section 401(a) which is exempt from tax under section 501(a), if the total distributions payable to the distributee with respect to an employee are paid to the distributee within one taxable year of the distributee— " (i) on account of the employee's death, "(ii) after the employee has attained the age of 591/2 years, or "(iii) after the employee has become disabled (within the meaning of section 213(g)(3)). " (B) A N N U I T Y PLANS.—Subject to the provisions of subparagraph (C), this subsection shall apply to amounts paid to a payee, in the case of an annuity plan described in section 403(a), if the total amounts payable to the payee with respect to an employee are paid to the payee within one taxable year of the payee— " (i) on account of the employee's deathj "(ii) after the employee has attained the age of 591/^ years, or "(iii) after the employee has become disabled (within the meaning of section 213(g)(3)). " (C) LIMITATIONS AND EXCEPTIONS.—This subsection shall apply— • "(i) only with respect to so much of any distribution or payment to which (without regard to this subparagraph) subparagraph (A) or (B) applies as is attributable to contributions made on behalf of an employee while he was an employee within the meaning of section 401 (c)(1), and "(ii) if the recipient is the employee on whose behalf such contributions were made, only if contributions which were allowed as a deduction under section 404 have been made on behalf of such employee while he was an employee within the meaning of section 401(c)(1) for

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