PUBLIC LAW 97-248—SEPT. 3, 1982 "(B) ALLOCATION ON FIRST-IN, FIRST-OUT BASIS.—For pur-
poses of subparagraph (A), the a m o u n t includible in gross income shall be allocated to the earliest investment in the contract with respect to which a m o u n t s have not been previously fully allocated under this paragraph. "(2) SUBSECTION NOT TO APPLY TO CERTAIN DISTRIBUTIONS.—
This subsection shall not apply to any distribution— "(A) m a d e on or after the date on which the tax p a y e r a t t a i n s age 59 Vz, "(B) m a d e to a beneficiary (or to the estate of a n a n n u itant) on or after the death of a n a n n u i t a n t, "(C) a t t r i b u t a b l e to the tax p a y e r ' s becoming disabled within the m e a n i n g of subsection (m)(7), "(D) which is one of a series of substantially equal periodic payments m a d e for the life of a tax p a y e r or over a period extending for a t least 60 months after the a n n u i t y s t a r t i n g date, "(E) from a plan, contract, account, trust, or a n n u i t y described in subsection (e)(5)(D), or "(F) allocable to investment in the contract before August 14, 1982." (2) CONFORMING AMENDMENTS. —
(A) Each of the following provisions a r e amended by inserting "section 72(q)(l) (relating to 5-percent tax on prem a t u r e distributions under a n n u i t y contracts)," after "owner-employees)": (i) Section 46(a)(4), (ii) Section 50A(a)(3), (iii) Section 53(a), (iv) Section 901(a). (B) Subparagraph (A) of section 1302(a)(2) is amended by inserting "or (q)(l)" after "section 72(m)(5)". (C) Paragraph (1) of section 1304(e) is amended— (i) by inserting " o r section 72(q)(l) (relating to 5-percent tax on p r e m a t u r e distributions under a n n u i t y contracts)" after "owner-employees)", and (ii) by inserting "or (q)(l)'^ after "Section 72(m)(5)" in the heading thereof, (c) EFFECTIVE D A T E S. —
(1) shall (2) shall
Ante, p. 546. 26 USC 46. 26 USC 50A. 26 USC 53. 26 USC 901. 26 USC 1302. 26 USC 1304. p
26 USC 72 note.
SUBSECTION (a).—The amendments m a d e by subsection (a) t a k e effect on August 13, 1982. SUBSECTION (b).—The amendments m a d e by subsection (b) apply to distributions after December 31, 1982.
SEC. 266. FLEXIBLE PREMIUM CONTRACTS. (a) IN GENERAL.—Section 101 (relating to exclusion from gross 26 USC lOi. income for certain death benefits) is amended by adding a t the e n d thereof the following new subsection: "(f) PROCEEDS O F FLEXIBLE P R E M I U M REASON OF D E A T H. —
CONTRACTS PAYABLE BY
"(1) IN GENERAL.—Any a m o u n t paid by reason of the death of the insured under a flexible p r e m i u m life insurance contract shall be excluded from gross income only if— "(A) under such contract— "(i) the s u m of the p r e m i u m s paid under such contract does not a t any time exceed the guideline prem i u m limitation as of such time, and
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