Page:United States Statutes at Large Volume 76.djvu/876

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26 USC 267.

PUBLIC LAW 87-792-OCT. 10, 1962

[76 STAT.

to which the plan is established, the term 'prohibited transaction' also means any transaction in which such trust, directly or indirectly— " (A) lends any part of the corpus or income of the trust to; " (B) pays any coriipensation for personal services rendered to the trust to; " (C) makfes any part of its services available on a preferential basis to; or " (D) acquires for the trust any property from, or sells any property to; any person described in subsection (o) or to any such owneremployee, a member of the family (as defined in section 267(c) (4)) of any such owner-employee, or a corporation controlled by any such owner-employee through the ownership, directly or indirectly, of 50 percent or more of the total combined voting power of all classes of stock entitled to vote or 50 percent or more of the total value of shares of all classes of stock of the corporation. "(2) SPECIAL RULE FOR LOANS.—For purposes of the application of paragraph (1)(A), the following rules shall apply with respect to a loan made before the date of the enactment of this subsection which would be a prohibited transaction if made in a taxable year beginning after December 31, 1962: " (A) If any part of the loan is repayable prior to December 31, 1965, the renewal of such part of the loan for a period not extending beyond December 31, 1965, on the same terms, shall not be considered a prohibited transaction. " (B) If the loan is repavable on demand, the continuation of the loan beyond December 31, 1965, shall be considered a prohibited transaction." SEC. 7. OTHER SPECIAL RULES, TECHNICAL CHANGES, AND ADMINISTRATIVE PROVISIONS. (a)

RETIREMENT INCOME CREDIT.—Section 37(c)(1) of the Internal

26 USC 37.

Revenue Code of 1954 (relating to definition of retirement income) is amended— (1) by striking out subparagraph (A) and inserting in lieu thereof the following: " (A) pensions and annuities (including, in the case of an individual who is, or has been, an employee within the meanAnte, p. 811. ing of section 401(c)(1), distributions by a trust described in 26 USC 401,501. section 401(a) which is exempt from tax under section 501 ( a j), "; and (2) by striking out "and" at the end of subparagraph (C), by striking out "or" at the end of subparagraph (D) and inserting in lieu thereof "and", and by adding after subparagraph (D) the following new subparagraph: Ante, p. 826. " (E) bonds descHbed in section 405(b)(1) which are received under a qualified bond purchase plan described in section 405(a) or in a distribution from a trust described in section 401(a) which is exempt from tax under section 501(a), or". (b) ADJUSTED GROSS INCOME.—Section 62 of the Internal Revenue 26 USC 62. Code of 1954 (relating to the definition of adjusted gross income) is amended by inserting after paragraph (6) the following new paragraph: "(7)

26 USC 404. Ante. p. 826.

PENSION, PROFIT-SHARING, ANNUITY, AND BOND PURCHASE OF SELF-EMPLOYED INDIVIDUALS.—^lu the casc of an indi-

PLANS vidual who is an employee within the meaning of section 401 (c)(1), the deductions allowed by section 404 and section 405(c) to the extent attributable to contributions made on behalf of such individual."

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