Page:United States Statutes at Large Volume 88 Part 1.djvu/1038

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PUBLIC LAW 93-406-SEPT. 2, 1974

26 USC 401.

26 USC 277.

26 USC 404.

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404

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122

[88 STAT.

" (A) such individual, if he is or was an employee within the meaning of section 401(c)(1), shall be treated (with respect to service covered by the plan) as being an employee other than an employee within the meaning of section 401(c)(1) and as being an employee of a participating employer under the plan, " (B) earnings derived from service covered by the plan shall be treated as not being earned income within the meaning of section 401(c)(2), and " (C) such individual shall be treated as an employee of a participating employer under the plan with respect to service before July 1, 1975, covered by the plan. Section 277 (relating to deductions incurred by certain membership organizations in transactions with members) does not apply to any trust described in this subsection.". (b) OTHER AMENDMENTS TO SECTION 4 0 4 (C)(1).—

(1) Paragraph (1) of the first sentence of section 404(c) is amended by striking out "and pensions" and inserting in lieu thereof "or pensions". (2) The last sentence of section 404(c) is amended by striking out "This subsection" and inserting in lieu thereof "The first and third sentences of this subsection". (c) EFFECTIVE DATE.—The amendments m.ade by this section shall apply to taxable years ending on or after June 30, 1972. SEC. 2007. RULES FOR CERTAIN NEGOTIATED PLANS.

10 USC 1431.

(a) IN GENERAL.—Section 122(a) (relating to certain reduced uniformed services retired pay) is amended to read as follows: " (a) GENERAL RULE.—In the case of a member or former member of the uniformed services of the United States, gross income does not include the amount of any reduction in his retired or retainer pay pursuant to the provisions of chapter 73 of title 10, United States Code.". (b) TECHNICAL AMENDMENTS.—

Ante, p

991.

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(1) Section 122(b)(2) is amended by striking out "section 1438" in subparagraph (B) and inserting in lieu thereof "section 1438 or 1452(d)". (2) Section 72(o) is amended by inserting after "Plan" in the heading of such section "or Survivor Benefit Plan". (3) Section 101(b)(2)(D) is amended by striking out ''if the individual who made the election under such chapter" and inserting in lieu thereof "if the member or former member of the uniformed services by reason of whose death such annuity is payable". (4) Section 2039(c) is amended by striking out "section 1438" in the last sentence and inserting in lieu thereof "section 1438 or 1452(d)". (c) EFFECTIVE DATES.—The amendments made by this section apply to taxable years ending on or after September 21, 1972. The amendments made by paragraphs (3) and (4) of subsection (b) apply with respect to individuals dying on or after such date.

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