Page:United States Statutes at Large Volume 88 Part 1.djvu/1008

 964

26 USC 501, 401.

PUBLIC LAW 93-406-SEPT. 2, 1974

[88 STAT.

individual retirement account assets which is exempt from taxation under this subtitle does not cease to be exempt on account of the participation or inclusion of assets of a trust exempt from taxation under section 501(a) which is described in section 401(a). "(f) ADDITIONAL TAX ON CERTAIN AMOUNTS INCLUDED I N GROSS INCOME BEFORE AGE 591/^— "(1) EARLY DISTRIBUTIONS FROM AN INDIVIDUAL RETIREMENT ACCOUNT, ETC.—If a distribution from an individual retirement

account or under an individual retirement annuity to the individual for whose benefit such account or annuity was established is made before such individual attains age 591/^, his tax under this chapter for the taxable year in which such distribution is received shall be increased by an amount equal to 10 percent of the amount of the distribution which is includible in his gross income for such taxable year. "(2) DISQUALIFICATION CASES.—If an amount is includible in gross income for a taxable year under subsection (e) and the taxpayer has not attained age 591/^ before the beginning of such taxable year, his tax under this chapter for such taxable year shall be increased by an amount equal to 10 percent of such amount so required to be included in his gross income. "(3) DISABILITY CASES.—Paragraphs (1) and (2) do not apply if the amount paid or distributed, or the disqualification of the account or annuity under subsection (e), is attributable to the taxpayer becoming disabled within the meaning of section 72(m)

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" (g) COMMUNITY PROPERTY LAWS.—This section shall be applied without regard to any community property laws. " (h) CUSTODIAL ACCOUNTS.—For purposes of this section, a custodial account shall be treated as a trust if the assets of such account are held by a bank (as defined in section 401(d)(1)) or another person who demonstrates, to the satisfaction of the Secretary or his delegate, that the manner in which he will administer the account will be consistent with the requirements of this section, and if the custodial account would, except for the fact that it is not a trust, constitute an individual retirement account described in subsection (a). For purposes of this title, in the case of a custodial account treated as a trust l3y reason of the preceding sentence, the custodian of such account shall be treated as the trustee thereof. " (i) REPORTS.—The trustee of an individual retirement account and the issuer of an endowment contract described in subsection (b) or an individual retirement annuity shall make such reports regarding such account, contract, or annuity to the Secretary or his delegate and to the individuals for whom the account, contract, or annuity is, or is to be, maintained with respect to contributions, distributions, and such other matters as the Secretary or his delegate may require under regulations. The reports required by this subsexition shall be filed at such time and in such manner and furnished to such individuals at such time and in such manner as may be required by those regulations. " (j) CROSS REFERENCES.—

Ante, p. 959. 26 USC 409. Anfe, p. 95 8.

"(1) For tax on excess contributions in individual retirement accounts or annuities, see section 4973. "(2) For tax on certain accumulations in individual retirement accounts or annuities, see section 4974." (c) RETIREMENT BONDS.—Subpart A of part I of subchapter D of chapter 1 (relating to retirement plans) is amended by inserting after sBction 408 the following new section: «gEC. 409. RETIREMENT BONDS. " (a) RETIREMENT BOND.—For purposes of this section and section 219(a), the term 'retirement bond' means a bond issued under the

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