76 STAT.]
PUBLIC LAW 87-792-OCT. 10, 1962
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 sub• section 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)
Ante, p. 823.
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." (c)
825
26 USC 63.
26 USC isi.
26 USC i, 3. 26 USC 3i.
CAPITAL GAINS TREATMENT OF CERTAIN EMPLOYEES' TRUST
DISTRIBUTIONS.—Section 402(a)(2) of the Internal Revenue Code of 1954 (relating to capital gains treatment for certain distributions) is amended by adding at the end thereof the following new sentence: "This paragraph shall not apply to distributions paid to any distributee to the extent such distributions are attributable to contributions made on behalf of the employee while he was an employee within the meaningof section 401(c)(1). "
Ante, p.sii.
(d) CAPITAL GAINS TREATMENT OF CERTAIN EMPLOYEES' A N N U I T Y
PAYMENTS.—Section 403(a) of the Internal Revenue Code of 1954 (relating to taxability of a beneficiary under a qualified annuity plan) is amended— (1) by striking out in paragraph (2)(A)(i) "which meets the requirements of section 401(a)(3), (4), (5), and (6) " and inserting ill lieu thereof "described in paragraph (1) "; i
26 USC 403.
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