Page:United States Statutes at Large Volume 83.djvu/619

 83 STAT.

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PUBLIC LAW 91-172-DEC. 30, 1969

591

«/|)) TAXABILITY OF BENEFICIARY OF NONEXEMPT TRUST.—Contri-

butions to an employees' trust made by an employer during a taxable year of the employer which ends within or with a taxable year of the trust for which the trust is not exempt from tax under section 501(a) shall be included in the gross income of the employee in accordance with section 83 (relating to property transferred in connection with performance of services), except that the value of the employee's iiiterest in the trust shall be substituted for the fair market value of the property for purposes of applying such section. The amount actually distributed or made available to any distributee by any such trust shall be taxable to him in the year in which so distributed or made available, under section 72 (relating to annuities), except that distributions of income of such trust before the annuity starting date (as defined in section 72(c)(4)) shall be included in the gross income of the employee without regard to section 72(e)(1) (relating to amount not received as annuities). A beneficiary of any such trust shall not be considered the owner of any portion of such trust under subpart E of part I of subchapter J (relating to grantors and others treated as substantial owners)."

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(2) BENEFICIARY UNDER NONQUALIFIED ANNUITY.—Section 403 7 2^|fau*i62o^^'

(relating to taxation of employee annuities) is amended by strik- 1622. ing out subsections (c) and (d) and inserting in lieu thereof the following new subsection: "(c) TAXABILITY OF BENEFICIARY UNDER NONQUALIFIED ANNUITIES O UNDER ANNUITIES PURCHASED BY EXEMPT ORGANIZATIONS.— R

jPremiums paid by an employer for an annuity contract which is not subject to subsection (a) shall be included in the gross income of the employee in accordance with section 83 (relating to property transferred in connection with performance of services), except that the value of such contract shall be substituted for the fair market value of the property for purposes of applying such section. The preceding sentence shall not apply to that portion of the premiums paid which is excluded from gross income under subsection (b). The amount actually paid or made available to any beneficiary under such contract shall be taxable to him in the year in which so paid or made available under section 72 (relating to annuities)." (3) DEDUCTIBILITY OF EMPLOYER CONTRIBUTIONS.—Section 404

(a)(5) (relating to deduction for contributions of an employer to an employees' trust, etc.) is amended to read as follows: "(5) OTHER PLANS.—If the plan is not one included in paragraph (1), (2), or (3), in the taxable year in which an amount attributable to the contribution is includible in the gross income of employees participating in the plan, but, in the case of a plan in which more than one employee participates only if separate accounts are maintained for each employee." (c) CLERICAL AMENDMENT.—The table of sections for part II of subchapter B of chapter 1 is amended by adding at the end thereof the following new item: "Sec. 83. Property transferred in connection with performance of services." (d) EFFECTIVE DATES.—The amendments made by subsections (a)

^nd (c) shall apply to taxable years ending after June 30, 1969. The amendments made by subsection (b) shall apply with respect to contributions made and premiums paid after August 1, 1969.

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