72 S T A T. ]
PUBLIC LAW 8 5 - 8 6 6 - S E P T. 2, 1958
(2) by inserting after paragraph (2) the following new paragraph: "(3) a retirement annuity contract purchased for an employee by an employer which is an organization referred to in section 503 (b)(1), (2), or (3), and which is exempt from tax under section 501(a). "; (3) by inserting after "under a plan described in paragraph (1) or (2) " in the second sentence the following: "or under a contract described in paragraph (3) "; and (4) by striking out the third sentence and inserting in lieu thereof the following: "For purposes of this subsection, contributions or payments made by the decedent's employer or former employer under a trust or plan described in paragraph (1) or (2) shall not be considered to be contributed by the decedent, and contributions or payments made by the decedent's employer or former employer toward the purchase of an annuity contract described in paragraph (3) shall, to the extent excludable from gross income under section 403(b), not be considered to be contributed by the decedent."
1623
26 USC sos.soi.
26 USC 403.
(f) ELECTION OF SURVIVOR BENEFITS.—Section 2517 (relating to
certain annuities under qualified plans), as added by section 68 of this Act, is amended— (1) by striking out "or" at the end of subsection (a)(1), and by striking out the period at the end of subsection (a)(2) and inserting in lieu thereof "; or"; (2) by inserting after subsection- (a)(2) the following new paragraph: "(3) a retirement annuity contract purchased for an employee by an employer which is an organization referred to in section 503 (b)(1), (2), or (3), and which is exempt from tax under section 501(a). "; and (3) by adding at the end of subsection (b) the following new sentence: "For purposes of the preceding sentence, payments or contributions made by the employee's employer or former employer toward the purchase of an annuity contract described in subsection (a)(3) shall, to the extent not excludable from gross income under section 403(b), be considered to have been made by the employee." (g) EFFECTIVE DATES.—The amendments made by subsections (a), (b), (c), and (d) shall apply with respect to taxable years beginning after December 31, 1957. The amendments made by subsection (e) shall apply with respect to estates of decedents dying after December 31, 1957. The amendments made by subsection (f) shall apply with respect to calendar years after 1957. SEC. 24. CONTRIBUTIONS OF EMPLOYER TO EMPLOYEES' TRUST OR ANNUITY PLAN. So much of section 404(a) (relating to deduction for contributions of an employer to an employees' trust or annuity plan, etc.) as precedes paragraph (1) thereof is amended by striking out "income) but if" and inserting in lieu thereof "income); but, if". SEC. 25. EMPLOYEE STOCK OPTIONS GRANTED BY PARENT OR SURSIDIARY CORPORATION. Section 421(a) (relating to employee stock options) is amended by adding at the end thereof the following new sentence: " I n applying paragraphs (2) and (3) of subsection (d) for purposes of the preceding sentence, there shall be substituted for the term 'employer corporation' wherever it appears in such paragraphs the term 'grantor corporation', or the term 'corporation issuing or assuming a stock option in a transaction to which subsection (g) is applicable', as the case may be."
26 USC 503.
26 USC 403.
26 USC 404.
26 USC 421.
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