88 STAT. ]
PUBLIC LAW 93-406-SEPT. 2, 1974
by an agency or instrumentality of any of the foregoing, or " (B) amounts were contributed by his employer for an annuity contract described in section 403(b) (whether or not his rights in such contract are nonforfeitable).
959
26 USC 403.
" (3) CONTRIBUTIONS AFITIR AGE TOJ.—No deduction is allowed
under subsection (a) with respect to any payment described in subsection (a) which is made during the taxable year of an individual who has attained age TOi^ before the close of such taxable year. "(4) EECONTRIBUTED AMOUNTS.—No deduction is allowed under this section with respect to a rollover contribution described in section 402(a)(5), 403(a)(4), 408(d)(3), or 409(b)(3)(C). J,%'u" ' ' ' ' " (5) AMOUNTS CONTRIBUTED UNDER ENDOWMENT CONTRACT.—
I n the case of an endowment contract described in section 408(b), no deduction is allowed under subsection (a) for that portion of the amounts paid under the contract for the taxable year properly allocable, under regulations prescribed by the Secretary or his delegate, to the cost of life insurance.
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" (c) DEFINITIONS AND SPECIAL RULES.—
"(1) COMPENSATION.—For purposes of this section, the term 'compensation' includes earned income as defined in section 401(c)(2). "(2) MARRIED INDIVIDUALS.—The
26 USC 401.
maximum deduction under subsection (b)(1) shall be computed separately for each individual, and this section shall be applied without regard to any community property laws.". (2)
DEDUCTION ALLOWED I N ARRIVING AT ADJUSTED GROSS
INCOME.—Section 62 (defining adjusted gross income) is amended by inserting after paragraph (9) the following new paragraph: "(10) RETIREMENT SAVINGS.—The deduction allowed by section 219 (relating to deduction of certain retirement savings).". ^"'^' P- ^^^• (b) INDIVIDUAL RETIREMENT ACCOUNTS.—Subpart A of part I of subchapter D of chapter 1 (relating to retirement plans) is amended ^^ ^^*^ '*°^by adding at the end thereof the following new section: "SEC. 408. INDIVIDUAL RETIREMENT ACCOUNTS. 26 USC 408. " (a) INDIVIDUAL RETIREMENT ACCOUNT.—For purposes of this section, the term 'individual retirement account' means a trust created or organized in the United States for the exclusive benefit of an individual or his beneficiaries, but only if the written governing instrument creating the trust meets the following requirements: "(1) Except in the case of a rollover contribution described in subsection (d)(3) in section 402(a)(5), 403(a)(4), or 409 (b)(3)(C), no contribution will be accepted unless it is in cash, and contributions will not be accepted for the taxable year in excess of $1,500 on behalf of any individual. "(2) The trustee is a bank (as defined in section 401(d)(1)) or such other person who demonstrates to the satisfaction of the Secretary or his delegate that the manner in which such other person will administer the trust will be consistent with the requirements of this section. " (3) No part of the trust funds will be invested in life insurance contracts. " (4) The interest of an individual in the balance in his account is nonforfeitable. "(5) The assets of the trust will not be commingled with other property except in a common trust fund or common investment fund.
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