Page:United States Statutes at Large Volume 83.djvu/673

 83 STAT. ]

PUBLIC LAW 91-172-DEC. 30, 1969

" (iii) with respect to an employee "svithin the meaning of section 401(c)(1), after lie has attained the age of 591/2 years, or " (iv) with respect to an employee within the meaning of sectioji 401(c)(1), after he has become disibled (within the meaning of subsection (m)(7)). " (C) MINIMUM PERIOD or SERVICE.—This subsection shall apply to amounts distributed or paid to an employee from or under a plan only if he has been a participant in the plan for 5 or more taxable years prior to the taxable year in which such amounts are distributed or paid, " (D) AMOUNTS SUHJECT TO I^EXALTY.—This subsection shall not apply to amounts described in clauses (ii) and (iii) of subparagraph (A) of subsection (m)(5) (but, in the case of auiounts described in clause (ii) of such subparagraph, only to the extent that subsection (m)(5) applies to such amounts)."; and (2) by adding at the end thereof the following new paragraph: "(4)

645 26 USC 401.

SPECIAL RULE FOR EMPLOYEES WITHOUT REOARD TO SECTION

401(C) (IK—111 the case of amounts to which this subsection applies which are distributed or paid with respect to an individual who is an employee without regard to section 401(c)(1), paragraph (2) shall be applied with the following modifications: " (A) '7 times' shall be substituted for '5 times', and '14% percent' shall be substituted for '20 percent'. " (B) Any amount which is received during the taxable year by the employee as compensation (other than as deferred compensation within the meaning of section 404) for personal services performed for the employer in respcct of whom the amounts distributed or paid are received shall not be taken, into account. " (C) No portion of the total distributions or amounts payable (of which the amounts distributed or paid are a part) to which section 402(a)(2) or 403(a)(2)(A) applies shall be taken into account. Subparagraph (B) shall not apply if the employee has not attained the age of 591/^ years, unless he has died or become disabled (within the meaning of subsection (m)(7)). " (c)

TECHNICAL AND CONFORMING AMENDMENTS.—

(1) Section 405(e) (relating to capital gains treatment not to apply to bonds distributed by trusts) is amended—

76 Stat. 82 7.

(A)

by striking out "CAPITAL GAINS TREATMENT" in the heading and inserting in lieu thereof "CAPITAL GAINS TREATMENT AND LIMITATION OF T A X ";

(B) by striking out "Section 402(a)(2) " and inserting in lieu thereof "Section 72(n) and section 402(a)(2) "; and (C) by striking out "section" and inserting in lieu thereof "sections". (2) Section 400(c) (relating to termination of status as deemed employee not to be treated as separation from service for purposes of capital gain provisions) is amended— (A) by striking out "PROVISIONS." in the heading and inserting in lieu thereof "PROVISIONS AND LIMITATION OF TAX.'*; and

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''^ Stat. 59.

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