Page:United States Statutes at Large Volume 98 Part 1.djvu/943

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 895

securities in a sale to which section 1042 applied, such plan or cooperative disposes of any qualified securities and— "(1) the total number of shares held by such plan or cooperative after such disposition is less then the total number of employer securities held immediately after such sale, or "(2) except to the extent provided in regulations, the value of qualified securities held by such plan or cooperative after such disposition is less than 30 percent of the total value of all employer securities as of such disposition, there is hereby imposed a tax on the disposition equal to the amount determined under subsection (b).

Ante, p. 887.

"(b) AMOUNT OF TAX.—

"(1) IN GENERAL.—The amount of the tax imposed by paragraph (1) shall be equal to 10 percent of the amount realized on the disposition. "(2) LIMITATION.—The amount realized taken into account under paragraph (1) shall not exceed that portion allocable to qualified securities acquired in the sale to which section 1042 applied (determined as if such securities were disposed of before any other securities). "(3) DISTRIBUTIONS TO EMPLOYEES.—The amount realized on any distribution to an employee for less than fair market value shall be determined as if the qualified security had been sold to the employee at fair market value. "(c) LIABILITY FOR PAYMENT OF TAXES.—The tax imposed by this subsection shall be paid by— "(1) the employer, or "(2) the eligible worker-owned cooperative, that made the written statement described in section 1042(a)(2)(B). "(d) SECTION NOT TO APPLY TO CERTAIN DISPOSITIONS.— "(1) CERTAIN DISTRIBUTIONS TO EMPLOYEES.—This section

shall not apply with respect to any distribution of qualified securities (or sale of such securities) which is made by reason of— "(A) the death of the employee, "(B) the retirement of the employee after the employee has attained 59V2 years of age, "(C) the disability of the employee (within the meaning of section 72(m)(5)), or "(D) the separation of the employee from service for any period which results in a 1-year break in service (within the meaning of section 411(a)(6)(A)). "(2) CERTAIN REORGANIZATIONS.—In the case of any exchange of qualified securities in any reorganization described in section 368(a)(1) for stock of another corporation, such exchange shall not be treated as a disposition for purposes of this section. "(e) DEFINITIONS AND SPECIAL RULES.—For purposes of this section— "(1) EMPLOYEE STOCK OWNERSHIP PLAN.—The term 'employee stock ownership plan' has the meaning given to such term by section 4975(e)(7). "(2) QUALIFIED SECURITIES.—The term 'qualified securities' has the meaning given to such term by section 1042(b)(1). "(3) ELIGIBLE WORKER-OWNED COOPERATIVE.—The term 'eligible worker-owned cooperative' has the meaning given to such term by section 1042(b)(1). "(4) DISPOSITION.—The term 'disposition' includes any distribution.

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