28
INTERNAL REVENUE CODE OF 1954
graph which is not greater than $1,000 with respect to any insured. Gross income includes, to the extent not excluded by the preceding sentence, amounts received under agreements to which this subsection applies. (2) AMOUNT HELD BY AN INSURER.—An amount held by an insurer with respect to any beneficiary shall mean an amount to which subsection (a) applies which is— (A) held by any insurer under an agreement provided for in the life insurance contract, whether as an option or otherwise, to pay such amount on a date or dates later than the death of the insured, and (B) is equal to the value of such agreement to such beneficiary (i) as of the date of death of the insured (as if any option exercised under the life insurance contract were exercised at such time), and (ii) as discounted on the basis of the interest rate and mortality tables used by the insurer in calculating payments under the agreement. (3) SURVIVING SPOUSE.—For purposes of this subsection, the term "surviving spouse" means the spouse of the insured as of the date o£ death, including a spouse legally separated but not under a decree of absolute divorce. (4) APPLICATION OF SUBSECTION.—This subsection shall not apply to any amount to which subsection (c) is applicable. (e) ALIMONY, ETC.. PAYMENTS.—
(1) IN GENERAL.—This section shall not apply to so much of any payment as is includible in the gross income of the wife under section 71 (relating to alimony) or section 682 (relating to income of an estate or trust in case of divorce, etc.). (2) CROSS REFERENCE.—
For definition of "wife", see section 7701(a) (17). (f) EFFECTIVE D A T E OF SECTION.—This section shall apply only to amounts received by reason of the death of an insured or an employee occurring after the date of enactment of this title. Section 22(b)(1) of the Internal Revenue Code of 1939 shall apply to amounts received by reason of the death of an insured or an employee occurring on or before such date. SEC. 102. GIFTS AND INHERITANCES. (a) GENERAL RULE. — G r o s s income does not include the value of
property acquired by gift, bequest, devise, or inheritance. (b) INCOME.—Subsection (a) shall not exclude from gross income— (1) the income from any property referred to in subsection (a); or (2) where the gift, bequest, devise, or inheritance is of income from property, the amount of such income. Where, under the terms of the gift, bequest, devise, or inheritance, the payment, crediting, or distribution thereof is to be made at intervals, then, to the extent that it is paid or credited or to be distributed out of income from property, it shall be treated for purposes of paragraph (2) as a gift, bequest, devise, or inheritance of income from property. Any amount included in the gross income of a § 101(d)(1)(B)
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