SEC. 72-Continued (m), (n), (o) (added 1964)-Continued "(iii) after the employee has become disabled (within the meaning of section 213(g) (3)). "(C) LIMITATIONS AND EXCEPTIONS.-This subsection shall apply "(i) only with respect to so much of any distribution or payment to which (without regard to this subparagraph) subparagraph (A) or (B) applies as is attributable to contributions made on behalf of an employee while he was an employee within the meaning of section 401(c)(1), and (ii) if the recipient is the employee on whose behalf such contributions were made, only if contributions which were allowed as a deduction under section 404 have been made on behalf of such employee while he was an employee within the meaning of section 401 (c) (1) for 5 or more taxable years prior to the taxable year in which the total distributions payable or total amounts payable, as the case may be, are paid. This subsection shall not apply to amounts described in clauses (ii) and (iii) of subparagraph (A) of subsection (m) (5) (but, in the case of amounts described in clause (ii) of such subparagraph, only to the extent that subsection (m) (5) applies to such amounts). "(2) LIMITATION OF TAX.-In any case to which this subsection applies, the tax attributable to the amounts to which this subsection applies for the taxable year in which such amounts are received shall not exceed whichever of the following is the greater: "(A) 5 times the increase in tax which would result from the inclusion in gross income of the recipient of 20 percent of so much of the amount so received as is includible in gross income, or "(B) 5 times the increase in tax which would result if the taxable income of the recipient for such taxable year equaled 20 percent of the amount of the taxable income of the recipient for such taxable year determined under paragraph (3) (A). "(3) DETERMINATION OF TAXABLE INCOME. Notwithstanding section 63 (relating to definition of taxable income), for purposes only of computing the tax under this chapter attributable to amounts to which this subsection or subsection (m) (5) applies and which are includible in gross income "(A) the taxable income of the recipient for the taxable year of receipt shall be treated as being not less than the amount by which (i) the aggregate of such amounts so includible in gross income exceeds (ii) the amount of the deductions allowed for such taxable year under section 151 (relating to deductions for personal exemptions); and "(B) in making ratable inclusion computations under paragraph (5) (B) of subsection (m), the taxable income of the recipient for each taxable year involved in such ratable inclusion shall be treated as being not less than the amount required by such paragraph (5) (B) to be treated as includible in gross income for such taxable year. In any case in which the preceding sentence results in an increase in taxable income for any taxable year, the resulting increase in the taxes imposed by section 1 or 3 for such taxable year shall not be reduced by any credit under part IV of subchapter A (other than section 31 thereof) which, but for this sentence, would be allowable." Applicability: Taxable years beginning after December 31, 1962. SEC. 72-Continued (m) (5) (A)(i). July 30, 1965, H.R. 6675, P.L. 89-97, § 106(d) (2) (A), 79 Stat. 337: (in part) Amended Sec. 72(m)(5)(A)(i) (as added by P.L. 87-792, § 4(b)) by striking out (m) (7) __ (added) "section 213(g)(3)” and inserting in lieu thereof "paragraph (7) of this subsection". Applicability: Taxable years beginning after December 31, 1966. July 30, 1965, H.R. 6675, P.L. 89-97, § 106(d)(2)(B), 79 Stat. 337: "(7) MEANING OF DISABLED. For purposes of this section, an individual shall be considered to be disabled if he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration. An individual shall not be considered to be disabled unless he furnishes proof of the existence thereof in such form and manner as the Secretary or his delegate may require." (n)(1)(A)......... July 30, 1965, H.R. 6675, P.L. 89-97, § 106(d) (2) (C), 79 Stat. 337: (cl. iii Amended Sec. 72(n)(1)(A) (iii) (as added by P.L. 87-792, § 4(b)) by striking out amended) (n)(1)(B) ___ July 30, 1965, H.R. 6675, P.L. 89-97, § 106(d)(2)(C), 79 Stat. 337: (cl. iii Amended Sec. 72(n) (1) (B) (iii) (as added by P.L. 87-792, § 4(b)) by striking out— amended) (n) (3) . (in part) June 21, 1965, H.R. 8371, P.L. 89-44, § 809(d)(2), 79 Stat. 167: Amended Sec. 72(n) (3) (as added by P.L. 87-792, §4(b)) by striking out SEC. 75. DEALERS IN TAX-EXEMPT SECURITIES (68A Stat. 25): Sept. 2, 1958, H.R. 8381, P.L. 85-866, § 2(a) (2), 72 Stat. 1606: Amended Sec. 75(a) (adjustment for bond premium) by striking out "short-term" each place it appeared before the words "municipal bond". (in part) Applicability: Taxable years ending after December 31, 1957, but only with respect to obligations acquired after such date. (Id., § 2(c), 72 Stat. 1607.) Sept. 2, 1958, H.R. 8381, P.L. 85-866, § 2(a)(3), 72 Stat. 1606: Amended sec. 75(a) by adding at the end a new sentence, as follows: "Notwithstanding the provisions of paragraph (1), no reduction to the cost of securities sold during the taxable year shall be made in respect of any obligation described in subsection (b)(1)(A) (ii) which is held by the taxpayer at the close of the taxable year; but in the taxable year in which any such obligation is sold or otherwise disposed of, if such obligation is a municipal bond (as defined in subsection (b)(1)), the cost of securities sold during such year shall be reduced by an amount equal to the adjustment described in paragraph (2), without regard to the fact that the taxpayer values his inventories on any basis other than cost." Applicability: Taxable years ending after December 31, 1957, but only with respect to obligations acquired after such date. (Id., § 2(c), 72 Stat. 1607.) Sept. 2, 1958, H.R. 8381, P.L. 85-866, § 2(a) (1), 72 Stat. 1606: Amended Sec. 75 by striking out paragraph (1) of subsection (b) which read as follows (68A Stat. 25): "(1) The term 'short-term municipal bond' means any obligation issued by a government or political subdivision thereof if the interest on such obligation is excludable from gross income; but such term does not include such an obligation if "(A) it is sold or otherwise disposed of by the taxpayer within 30 days after the date of its acquisition by him, or "(B) its earliest maturity or call date is a date more than 5 years from the date on which it was acquired by the taxpayer.", and inserting in lieu thereof the following: "(1) The term 'municipal bond' means any obligation issued by a government or political subdivision thereof if the interest on such obligation is excludable from gross income; but such term does not include such an obligation if "(A) (i) it is sold or otherwise disposed of by the taxpayer within 30 days after the date of its acquisition by him, or "(ii) its earliest maturity or call date is a date more than 5 years from the date on which it was acquired by the taxpayer; and "(B) when it is sold or otherwise disposed of by the taxpayer"(i) in the case of a sale, the amount realized, or "(ii) in the case of any other disposition, its fair market value at the time of such disposition, is higher than its adjusted basis (computed without regard to Determinations under subparagraph (B) shall be exclusive of interest." Taxable years ending after December 31, 1957, but only with respect to obligations acquired after such date. (Id., § 2(c), 72 Stat. 1607.) SEC. 78. DIVIDENDS RECEIVED FROM CERTAIN FOREIGN CORPORATIONS BY DOMESTIC CORPORATIONS CHOOSING FOREIGN TAX CREDIT (Added 1962-76 Stat. 1001): Added Oct. 16, 1962, H.R. 10650, P.L. 87-834, § 9(b), 76 Stat. 1001: Amended Part II of Subchapter B of Chapter 1 (relating to items specifically included in gross income) by adding after section 77 (commodity credit loans) the following new section 78: "SEC. 78. DIVIDENDS RECEIVED FROM CERTAIN FOREIGN CORPORATIONS BY DOMESTIC CORPORATIONS CHOOSING FOREIGN TAX CREDIT. "If a domestic corporation chooses to have the benefits of subpart A of part III of subchapter N (relating to foreign tax credit) for any taxable year, an amount equal to the taxes deemed to be paid by such corporation under section 902(a) (1) (relating to credit for corporate stockholder in foreign corporation) or under section 960 (a) (1) (C) (relating to taxes paid by foreign corporation) for such taxable year shall be treated for purposes of this title (other than section 245) as a dividend received by such domestic corporation from the foreign corporation." Applicability: The amendments made by this section shall apply "(1) in respect of any distribution received by a domestic corporation after December 31, 1964, and "(2) in respect of any distribution received by a domestic corporation before January 1, 1965, in a taxable year of such corporation beginning after December 31, 1962, but only to the extent that such distribution is made out of the accumulated profits of a foreign corporation for a taxable year (of such foreign corporation) beginning after December 31, 1962. For purposes of paragraph (2), a distribution made by a foreign corporation out of its profits which are attributable to a distribution received from a foreign subsidiary to which section 902(b) applies shall be treated as made out of the accumulated profits of a foreign corporation for a taxable year beginning before January 1, 1963, to the extent that such distribution was paid out of the accumulated profits of such foreign subsidiary for a taxable year beginning before January 1, 1963." (Id., § 9(e), 76 Stat. 1001-1002.) SEC. 79. GROUP-TERM LIFE INSURANCE PURCHASED FOR EMPLOYEES (Added 1964-78 Stat. 36): Added............. Feb. 26, 1964, H.R. 8363, P.L. 88-272, § 204(a)(1), 78 Stat. 36: Amended Part II of Subchapter B of Chapter 1 (relating to items specifically included in gross income) by adding at the end thereof, after section 78 (as added by P.L. 87-834, § 9(b)) the following new section 79: "SEC. 79. GROUP-TERM LIFE INSURANCE PURCHASED FOR EMPLOYEES. "(a) GENERAL RULE.-There shall be included in the gross income of an employee for the taxable year an amount equal to the cost of group-term life insurance on his life provided for part or all of such year under a policy (or policies) carried directly or indirectly by his employer (or employers); but only to the extent that such cost exceeds the sum of "(1) the cost of $50,000 of such insurance, and "(2) the amount (if any) paid by the employee toward the purchase of such insurance. SEC. 79 (added 1964)—Continued "(b) EXCEPTIONS.-Subsection (a) shall not apply to "(1) the cost of group-term life insurance on the life of an individual which is provided under a policy carried directly or indirectly by an employer after such individual has terminated his employment with such employer and either has reached the retirement age with respect to such employer or is disabled (within the meaning of paragraph (3) of section 213(g), determined without regard to paragraph (4) thereof), "(2) the cost of any portion of the group-term life insurance on the life of an employee provided during part or all of the taxable year of the employee under which "(A) the employer is directly or indirectly the beneficiary, or "(B) a person described in section 170(c) is the sole beneficiary, for the entire period during such taxable year for which the employee receives such insurance, and (3) the cost of any group-term life insurance which is provided under a contract to which section 72(m((3) applies. "(c) DETERMINATION OF COST OF INSURANCE.-For purposes of this section and section 6052, the cost of group-term insurance on the life of an employee provided during any period shall be determined on the basis of uniform premiums (computed on the basis of 5-year age brackets) prescribed by regulations by the Secretary or his delegate. In the case of an employee who has attained age 64, the cost prescribed shall not exceed the cost with respect to such individual if he were age 63." Applicability: With respect to group-term life insurance provided after December 31, 1963, in taxable years ending after such date. 23 (Id., § 204 (d), 78 Stat. 37.) 2 23 Subsection (d) of section 204 of P.L. 88-272 read as follows: "(d) EFFECTIVE DATES.-The amendments made by subsections (a) and (c), and paragraph (3) of section 6652(a) of the Internal Revenue Code of 1954 (as amended by section 221(b)(2) of this Act), shall apply with respect to group-term life insurance provided after December 31, 1963, in taxable years ending after such date. The amendments made by subsection (b) shall apply with respect to remuneration paid after December 31, 1963, in the form of group-term life insurance provided after such date. In applying section 79(b) of the Internal Revenue Code of 1954 (as added by subsection (a)(1) of this section) to a taxable year beginning before May 1, 1964, if paragraph (2)(B) of such section applies with respect to an employee for the period beginning May 1, 1964, and ending with the close of his first taxable year ending after April 30, 1964, such paragraph (2) (B) shall be treated as applying with respect to such employee for the period begining January 1, 1964, and ending April 30, 1964." The above-mentioned amendments made by section 204 of P.L. 88-272 were as follows: Subsection (a) (1) added new Code section 79 (this amendment). Subsection (a) (2) amended the table of sections for Part II of Subchapter B of Chapter 1 (p. 56 above). Subsection (a) (3) amended Code section 7701(a) (20) (p. 1189 below). Subsection (b) amended Code section 3401 (a) by adding at the end thereof a new paragraph (14) (p. 660 below). Subsection (c) (1) added a new Code section 6052 (p. 999 below). Subsection (c) (2) amended Code section 6678 (p. 1132 below). Subsection (c) (3) amended the table of sections for Subpart C of Part III of Subchapter A of Chapter 61 (p. 996 below). Subsection (c) (4) contains a cross reference to Code section 6652(a)(3). For paragraph (3) of section 6652 (a) (as revised by section 221(b)(2) of P.L. 88-272), see p. 1123 below. 60-448-67- -6 |