76
STAT.]
PUBLIC
LAW 87-792-OCT. 10, 1%2
829
(c) DEATH BENEFITS.—Section 101(b) of the Internal Revenue Code of 1954 (relating to employees' death benefits) is amended— (1) by striking out clause (ii) of paragraph (2)(B) and inserting in lieu thereof the following:. "(ii) under an annuity contract under a plan described in section 403(a), or"; and (2) by adding at the end thereof the following new paragraph: "(3)
SELF-EMPLOYED
INDIVIDUAL
NOT
CONSIDERED
AN
AMOUNTS RECEIVED THROUGH ACCIDENT OR HEALTH
A M O U N T S RECEIVED U N D E R A C C I D E N T AND H E A L T H
UNINCORPORATED
BUSINESSES
ELECTING
To
BE
26 USC 104.
26 USC 401,501, 26 USC 404.
PLANS.—
Section 105 of the Internal Revenue Code of 1954 (relating to amounts received under accident and health plans) is amended by adding at the end thereof the following new subsection: " (g) SELF-EMPLOYED iNDivrouAL NOT CoNsmERED AN EMPLOYEE.— For purposes of this section, the term 'employee' does not include an individual who is an employee within the meaning of section 401 (c)(1) (relating to self-employed individuals)." (f) N E T OPERATING Loss DEDUCTION.—Section 172(d)(4) of the Internal Revenue Code of 1954 (relating to nonbusiness deductions of taxpayers other than corporations) is amended— (1) by striking out "and" at the end of subparagraph (B); (2) by striking out the period at the end of subparagraph (C) and inserting "; and"; and (3) by adding after subparagraph (C) the following new subparagraph: " (D) any deduction allowed under section 404 or section 405(c) to the extent attributable to contributions which are made on behalf of an individual who is an employee within the meaning of section 401(c)(1) shall not be treated as attributable to the trade or business of such individual." (g) CERTAIN L I F E INSURANCE RESERVES.—Section 805(d)(1) of the Internal Revenue Code of 1954 (relating to pension plan reserves) is amended— (1) by striking out in subparagraph (B) "meeting the requirements of section 401(a)(3), (4), (5), and (6) or" and inserting in lieu thereof "described in section 403(a), or plans meeting"; and (2) by striking out in subparagraph (C) "and (6) " and inserting in lieu thereof " (6), (7), and (8)". (h)
Ante. p. sii.
INSUR-
ANCE.—Section 104(a) of the Internal Revenue Code of 1954 (relating to compensation for injuries or sickness) is amended by adding at the end thereof the following new sentence: "For purposes of paragraph (3), in the case of an individual who is, or has been, an employee within the meaning of section 401(c)(1) (relating to self-employed individuals), contributions made on behalf of such individual while he was such an employee to a trust described in section 401(a) which is exempt from tax under section 501(a), or under a plan described in section 403(a), shall, to the extent allowed as deductions under section 404, be treated as contributions by the employer which were not includible in the gross income of the employee." (e)
26 USC 403.
EM-
PLOYEE.—For purposes of this subsection, the term 'employee' does not include an individual who is an employee within the meaning of section 401(c)(1) (relating to self-employed individuals)." (d)
26 USC loi.
TAXED
26 USC 105.
26 USC 172.
Ante, p. 826.
26 USC sos. 26 USC 401. 26 USC 403.
AS
CORPORATIONS.—Section 1361(d) of the Internal Revenue Code of 1954 (relating to unincorporated business enterprises electing to be taxed as domestic corporations) is amended by inserting before the period at the end thereof the following: "other than an employee within the meaning of section 401(c)(1) (relating to self-employed
26 USC isei.
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