Page:United States Statutes at Large Volume 92 Part 3.djvu/174

 92 STAT. 2806

PUBLIC LAW 95-600—NOV. 6, 1978 (d) REQUIREMENT THAT ANNUITY CONTRACTS WILL QUALIFY AS INDIVIDUAL RETIREMENT ANNUITY ONLY IF THE PREMIUMS ARE FLEXIBLE.—

26 USC 408.

(1) IN GENERAL.—Paragraph (2) of section 408(b) (defining individual retirement annuity) is amended to read as follows: "(2) Under the contract— "(A) the premiums are not fixed, "(B) the annual premium will not exceed $1,500, and "(C) any refund of premiums will be applied before the close of the calendar year following the year of the refund toward the payment of future premiums or the purchase of additional benefits." (2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall apply to contracts issued after the date of the enactment of this Act.

26 USC 408 "ot^26 USC 408

(3) TAX REUEF FOR FIXED PREMIUM CONTRACTS HERETOFORE

not^-

ISSUED.—In the case of any annuity or endowment contract issued on or before the date of the enactment of this Act which would be an individual retirement annuity within the meaning of section 408(b) of the Internal Revenue Code of 1954 (as amended by paragraph (1)) but for the fact that the premiums under the contract are fixed, at the election of the taxpayer an exchange before January 1, 1981, of that contract for an individual retirement annuity within the meaning of such section 408(b) (as amended by paragraph (1)) shall be treated as a nontaxable exchange which does not constitute a distribution.

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(e) CLARIFICATION OF DOLLAR LIMIT IN THE CASE OF INDIVIDUAL RETIREMENT ANNUITIES AND RETIREMENT BONDS.— (1) IN GENERAL.— (A) AMENDMENT OF SECTION 408(b)(2).—Subparagraph (B)

of section 408(b)(2) (as amended by paragraph (1) of subsection (d)) is amended by inserting "on behalf of any individual" after "annual premium". (B) AMENDMENT OF SECTION 409(a)(4).—Paragraph (4) of section 409(a) (relating to retirement bonds) is amended by inserting "on behalf of any individual" after "May not contribute". (2) EFFECTIVE DATE.—The amendments made by paragraph (1) shall apply to taxable years beginning after December 31, 1976.

26 USC 409.

26 USC 408 "ote. 26 USC 402.

(f) ROLLOVER OF PROCEEDS FROM SALE OF PROPERTY PERMITTED,— (1) ROLLOVERS FROM QUALIFIED EMPLOYEES' TRUSTS AND ANNU-

ITIES.—Paragraph (6) of section 402(a) (relating to special rollover rules) is amended by adding at the end thereof the following new subparagraph: "(D)

SALES OF DISTRIBUTED PROPERTY.—For purposes of

subparagraphs (5) and (7)— "(i) TRANSFER OF PROCEEDS FROM SALE OF DISTRIBUTED PROPERTY TREATED AS TRANSFER OF DISTRIBUTED PROP-

s;

ERTY,—The transfer of an amount equal to any portion of the proceeds from the sale of property received in the distribution shall be treated as the transfer of property received in the distribution. "(ii) PROCEEDS ATTRIBUTABLE TO INCREASE IN VALUE.—

The excess of fair market value of property on sale over its fair market value on distribution shall be treated as property received in the distribution.

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