Page:United States Statutes at Large Volume 76.djvu/874

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PUBLIC LAW 87-792-OCT. 10, 1962

[76 STAT.

(2) by adding at the end of paragraph (2)(A) the following new sentence: "This subparagraph shall not apply to amounts paid to any payee to the extent such amounts are attributable to contributions made on behalf of the employee while he was an Ante, p. 811. employee within the meaning of section 401(c)(1)."; and (3) by adding after paragraph (2) the following new paragraph: "(3) SELF-EMPLOYED INDIVIDUALS.—For purposes of this subsection, the term 'employee' includes an individual who is an employee within the meaning of section 401(c)(1), and the employer of such individual is the person treated as his employer under section 401(c)(4)." SEC. 5. PLANS FOR PURCHASE OF UNITED STATES BONDS. (a) QUALIFIED BOND PURCHASE P L A N S. — Part I of subchapter D 26 USC 401-404. of chapter 1 of the Internal Revenue Code of 1954 (relating to deferred compensation, etc.) is amended by adding at the end thereof the following new section: "SEC. 405. QUALIFIED BOND PURCHASE PLANS. " (a) REQUIREMENTS FOR QUALIFICATION.—A plan of an employer for the purchase for and distribution to his employees or their beneficiaries of United States bonds described in subsection (b) shall constitute a qualified bond purchase plan under this section if— 26 USC 401. " (1) the plan meets the requirements of section 401(a)(3), (4), Ante, pp.810(5), (6), (7), and (8) and, if applicable, the requirements of section 401(a)(9) and (10) and of section 401(d) (other than paragraphs (1), (5)(B), and (8)); and "(2) contributions under the plan are used solely to purchase for employees or their beneficiaries United States bonds described in subsection (b). "(b)

40 Stat. 288. 31 USC 774.

72 Stat. 1614. 26 USC 213.

BONDS TO W H I C H APPLICABLE.— " (1) CHARACTERISTICS OF BONDS.—This

section shall apply only to a bond issued under the Second Liberty Bond Act, as amended, which by its terms, or by regulations prescribed by the Secretary under such Act— " (A) provides for payment of interest, or investment yield, only upon redemption; " (B) may be purchased only in the name of an individual; " (C) ceases to bear interest, or provide investment ^ield, not later than 5 years after the death of the individual in whose name it is purchased; " (D) may be redeemed before the death of the individual in whose name it is purchased only if such individual— " (i) has attained the age of 59i/^ years, or "(ii) has become disabled (within the meaning of section 213(g)(3)); and " (E) is nontransferable. "(2) MUST BE PURCHASED IN NAME OF EMPLOYEE.—This section shall apply to a bond described in paragraph (1) only if it is purchased in the name of the employee. "(c)

DEDUCTION FOR CONTRIBUTIONS TO BOND PURCHASE P L A N S. —

Contributions paid by an employer to or under a qualified bond purchase plan shall be allowed as a deduction in an amount determined 26 USC 404,401, Under section 404 in the same manner and to the same extent as if such 501contributions were made to a trust described in section 401(a) which is exempt from tax under section 501(a).

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