Page:United States Statutes at Large Volume 90 Part 2.djvu/427

 PUBLIC LAW 94^55—OCT. 4, 1976

90 STAT. 1895

(3) was not allowable as a deduction under section 219 and was not a rollover contribution described in section 402(a)(5), 403(a)(4), 408 (d)(3), or 409(b)(3)(C), the preceding sentence shall not apply to that portion of the value of the amount receivable under such account, annuity, or bond (as the case may be) which bears the same ratio to the total value of the amount so receivable as the total amount which was paid to or for such account, annuity, or bond and which was not allowable as a deduction under section 219 and was not such a rollover contribution bears to the total amount paid to or for such account, annuity, or bond. For purposes of this subsection, the term 'annuity' "Annuity." means an annuity contract or other arrangement providing for a series of substantially equal periodic payments to be made to a beneficiary (other than the executor) for his life or over a period extending for at least 36 months after the date of the decedent's death." (2) EXCLUSION FROM GROSS ESTATE or SELF-EMPLOYED PLANS.—

The fifth sentence of section 2039(c) (relating to exemption of 26 USC 2039. annuities under certain trusts and plans) is amended to read as follows: "For purposes of this subsection, contributions or payments on behalf of the decedent while he was an employee within the meaning of section 401(c)(1) made under a trust or plan described in paragraph (1) or (2) shall, to the extent allowable as a deduction under section 404, be considered to be made by a person other than the decedent and, to the extent not so allowable, shall be considered to be made by the decedent." (3)

EXCLUSION INAPPLICABLE IN CASE OF LUMP SUM DISTRIBU-

TioNS.—The first sentence of subsection (c) of section 2039 (relating to exemption of annuities under certain trusts and plans) is amended by striking out "other payment receivable by any beneficiary" and inserting in lieu thereof "other payment (other than a lump sum distribution described in section 402(e)(4), determined without regard to the next to the last sentence of section 402(e)(4)(A)) receivable by any beneficiary". (4) G I F T TAX TREATMENT OF ELECTIONS UNDER CERTAIN RETIREMENT PLANS. (A) INDIVIDUAL RETIREMENT ACCOUNTS, ETC.—

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(i) Subsection (a) of section 2517 (relating to certain 26 USC 2517. annuities under qualified plans) is amended by striking out "or" at the end of paragraph (3), by striking out the period at the end of paragraph (4) and inserting in lieu thereof "; or", and by inserting after paragraph (4) the following new paragraph: "(5) an individual retirement account described in section 408 (a) an individual retirement annuity described in section 408 (b), or a retirement bond described in section 409(a)." (ii) Subsection (b) of section 2517 (relating to transfers attributable to employee contributions) is amended by striking out "other than paragraph (4)" and inserting in lieu thereof "other than paragraphs (4) and (5)". (iii) Subsection (c) of section 2517 (defining employee) is amended by adding at the end thereof the following new sentence: "In the case of a retirement plan described in paragraph (5) of subsection (a), such term means the individual for whose benefit the plan was established." (B) SELF-EMPLOYED PLANS.—The last sentence of section 2517(b) (relating to transfers attributable to employee con-

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