Page:United States Statutes at Large Volume 90 Part 1.djvu/415

 PUBLIC LAW 94-267—APR. 15, 1976

90 STAT. 365

Public Law 94-267 94th Congress An Act To amend the Internal Revenue Code of 1954 to permit tax-free rollovers of distributions from employee retirement plans in the event of plan termination.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That— (a) TERMINATION OF EMPLOYEE TRUST, ETC.—Section 402(a) of the Internal Revenue Code of 1954 (relating to taxability of beneficiaries of exempt trusts) is amended— (1) by striking out paragraph (5)(A) and inserting in lieu thereof the following: "(A) the balance to the credit of an employee is paid to him— " (i) within one taxable year of the employee on account of a termination of the plan of which the trust is a part or, in the case of a profit-sharing or stock bonus plan, a complete discontinuance of contributions under such plan, or "(ii) in one or more distributions which constitute a lump-sum distribution within the meaning of subsection (e)(4)(A) (determined without reference to subsection (e)(4)(B)),", (2) by striking out "the lump-sum distribution" in the last sentence of paragraph (5) and inserting in lieu thereof "a payment", and (3) by adding at the end thereof the following paragraph:

Apr. 15, 1976 [H.R. 12725]

Internal Revenue Code of 1954, amendments. 26 USC 402.

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"(6) SPECIAL ROLLOVER RULES.—For purposes of paragraph

(5)(A)m"(A) TIME OF TERMINATION.—A complete discontinuance

of contributions under a profit-sharing or stock bonus plan shall be deemed to occur on the day the plan administrator notifies the Secretary or his delegate (in accordance with regulations prescribed by the Secretary or his delegate) that all contributions to the plan have been completely discontinued. For purposes of section 411(d)(3), the plan shall be 26 USC 411. considered to be terminated no later than the day such notice is filed with the Secretary or his delegate. "(B)

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S A L E o r S U B S I D I A R Y OR ASSETS.—

"(i) A payment of the balance to the credit of an employee of a corporation (hereinafter referred to as the employer corporation) which is a subsidiary corporation (withm the meaning of section 425(f)) or which is a 26 USC 425. member of a controlled group of corporations (within the meaning of section 1563(a), determined by substi- 26 USC 1563. tuting '50 percent' for '80 percent' each place it appears therein) in connection with the liquidation, sale, or other means of terminating the parent-subsidiary or controlled group relationship of the employer corporation with the parent corporation or controlled group, or "(ii) a payment of the balance to the credit of an employee of a corporation (hereinafter referred to as the acquiring corporation) in connection with the sale or

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