Page:United States Statutes at Large Volume 88 Part 1.djvu/1009

 88 STAT. ]

PUBLIC LAW 93-406-SEPT. 2, 1974

965

Second Liberty Bond Act, as amended, which by its terms, or by ^i use 774. regulations prescribed by the Secretary or his delegate under such Act— "(1) provides for payment of interest, or investment yield, only on redemption; "(2) provides that no interest, or investment yield, is payable if the bond is redeemed within 12 months after the date of its issuance; "(3) provides that it ceases to bear interest, or provide investment yield on the earlier of— " (A) the date on which the individual in whose name it is purchased (hereinafter in this section referred to as the 'registered owner') attains age 701/2; or " (B) 5 years after the date on which the registered owner dies, but not later than the date on which he would have attained the age 70i/^ had he lived; "(4) provides that, except in the case of a rollover contribution described in subsection (b)(3)(C) or in section 402(a)(5), ^J^°«''p^^^^^i, 403(a)(4), or 408(d)(3) the registered owner may not contribute ^°^i| p.* 959.' for the purchase of such bonds in excess of $1,500 in any taxable year; and "(5) is not transferable. " (b) INCOME T A X TREATMENT OF BONDS.—

"(1) IN GENERAL.—Except as otherwise provided in this subsection, on the redemption of a retirement bond the entire proceeds shall be included in the gross income of the taxpayer entitled to the proceeds on redemption. If the registered owner has not tendered it for redemption before the close of the taxable year in which he attains age 701^, such individual shall include in his gross income for such taxable year the amount of proceeds he would have received if the bond had been redeemed at age 701^. The provisions of section 72 (relating to annuities) and section ^^ "^^ ^21232 (relating to bonds and other evidences of indebtedness) shall not apply to a retirement bond. " (2) BASIS.—The basis of a retirement bond is zero. " (3) EXCEPTIONS.— " (A) REDEMPTION WITHIN

12 MONTHS.—If a retirement bond is redeemed within 12 months after the date of its issuance, the proceeds are excluded from gross income if no deduction is allowed under section 219 on account of the ^"*^' P- ^^^• purchase of such bond. " (B) REDEMPTION AFTER AGE 70i.—If a retirement bond is redeemed after the close of the taxable year in which the registered owner attains age 701/^, the proceeds from the redemption of the bond are excluded from the gross income of the registered owner to the extent that such proceeds were includible in his gross income for such taxable year. " (C) ROLLOVER INTO AN INDIVIDUAL RETIREMENT ACCOUNT O ANNUITY OR A QUALIFIED PLAN.—If a retirement bond is R

redeemed at any time before the close of the taxable year in which the registered owner attains age 70i/^, and the registered owner transfers the entire amount of the proceeds from the redemption of the bond to an individual retirement account described in section 408(a) or to an individual retire- Ante, p. 959. ment annuity described in section 408(b) (other than an endowment contract) which is maintained for the benefit of the registered owner of the bond, or to an employees' trust described in section 401(a) which is exempt from tax under 26 USC 401, 26 section 501(a), or an annuity plan described in section 403(a) 403. u s e 501,

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