Page:United States Statutes at Large Volume 88 Part 1.djvu/1036

 992 26 USC 871, Ante. p. 987. Ante, p. 959.

PUBLIC LAW 93-406-SEPT. 2, 1974

(8) Sections 871(b)(1) and 877(b) are each amended by insertIng",402(e)(1),"after"section 1". (9) Section 62 (defining adjusted gross income), is amended by inserting after paragraph (10) the following new paragraph: "(11)

26 USC 122. 26 USC 405.

26 USC 406.

26 USC 407.

26 USC 1348.

26 USC 101.

26 USC 402 note.

26 USC 401 note.

[88 STAT.

CERTAIN PORTION or LUMP-SUM DISTRIBUTIONS FROM PEN-

SION PLANS TAXED UNDER SECTION 402 (e).—The deduction allowed by section 402(e)(3)." (10) Section 122(b)(2) (relating to consideration for the contract) is amended by striking out "72(o)" and inserting "72(n)". (11) Section 405(e) (relating to capital gains treatment and limitation of tax not to apply to bonds distributed by trusts) is amended by striking out "Section 72(n) and section 402(a)(2) " and inserting "Subsections (a)(2) and (e) of section 402". (12) Section 406(c) (relating to termination of status as deemed employee, etc.) is amended by striking out "section 72(n), section 402(a)(2) " and inserting "subsections (a)(2) and (e) of section 402". (13) Section 407(c) (relating to termination of status as deemed employee, etc.) is amended by striking out "section 72(n), section 402(a)(2) " and inserting "subsections (a)(2) and (e) of section 402". (14) Section 1348(b)(1) (relating to earned income) is amended by striking out "72(n), 402(a)(2) " and inserting "402 (a)(2), 402(e)". (15) Section 101(b)(2)(B) is amended by striking out "total distributions payable (as defined in section 402(a)(3)) which are paid to a distributee within one taxable year of the distributee by reason of the employee's death" and inserting in lieu thereof "a lump sum distribution (as defined in section 4 0 2 (e)(4)) ". (d) EFFECTIVE DATE.—The amendments made by this section shall apply only with respect to distributions or payments made after December 31, 1973, in taxable years beginning after such date. SEC. 2006. SALARY REDUCTION REGULATIONS. (a) INCLUSION OF CERTAIN CONTRIBUTIONS I N INCOME.—Except in

403^ 405^ ^°^' 26 USC 501.

the case of plans or arrangements in existence on June 27, 1974, a contribution made before January 1, 1977, to an employees' trust described in section 401(a), 403 (a), or 405 (a) of the Internal Revenue Code of 1954 which is exempt from tax under section 501(a) of such Code, or under an arrangement which, but for the fact that it was not in existence on June 27, 1974, would be an arrangement described in subsection (b)(2) of this section, shall be treated as a contribution made by an employee if the contribution is made under an arrangement under which the contribution will be made only if the employee elects to receive a reduction in his compensation or to forego an increase in his compensation. (b) ADMINISTRATION I N THE CASE OF CERTAIN QUALIFIED PENSION O PROFIT-SHARING PLANS, E T C., I N EXISTENCE ON J U N E 27, 1974.— R

No salary reduction regulations may be issued by the Secretary of the Treasury in final form before January 1, 1977, with respect to an arrangement which was in existence on June 27, 1974, and which, on that date— (1) provided for contributions to an employees' trust described in section 401(a), 403(a), or 405 (a) of the Intemaf Revenue Code of 1954 which is exempt from tax under section 501(a) of such Code, or (2) was maintained as part of an arrangement under which an

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