PUBLIC LAW 99-514—OCT. 22, 1986
100 STAT. 2849
"(A) which is provided— "(i) under a plan described in section 401(a) which includes a trust exempt from tax under section 501, or "(ii) under a plan described in section 403(a), "(B) which is described in section 403(b), or "(C) which is an individual retirement annuity or provided under an individual retirement account or annuity." (b) SPECIAL RULES WHERE HOLDER IS NOT INDIVIDUAL, ETC.—
(1) Subsection (s) of section 72 (relating to required distributions where holder dies before entire interest is distributed) is amended by adding at the end thereof the following new paragraphs: "(6) SPECIAL RULE WHERE HOLDER IS CORPORATION OR OTHER NON-INDIVIDUAL.—
"(A) IN GENERAL.—For purposes of this subsection, if the holder of the contract is not an individual, the primary annuitant shall be treated as the holder of the contract. "(B) PRIMARY ANNUITANT.—For purposes of subpara-
graph (A), the term 'primary annuitant' means the individual, the events in the life of whom are of primary importance in affecting the timing or amount of the payout under the contract. "(7) TREATMENT OF CHANGES IN PRIMARY ANNUITANT WHERE HOLDER OF CONTRACT IS NOT AN INDIVIDUAL.—For plirpOSCS of
this subsection, in the case of a holder of an annuity contract which is not an individual, if there is a change in a primary annuity (as defined in paragraph (6)(B)), such change shall be treated as the death of the holder." (2) Paragraph (1) of section 72(s) is amended by striking out "the holder of such contract" each place it appears and inserting in lieu thereof "any holder of such contract'. (3) Paragraph (4) of section 72(e) (relating to amounts not received as annuities) is amended by adding at the end thereof the following new subparagraph: "(C)
TREATMENT
OF TRANSFERS
WITHOUT ADEQUATE
CONSIDERATION.— "(i) IN GENERAL.—If an individual who holds an annuity contract transfers it without full and adequate consideration, such individual shall be treated as receiving an amount equal to the excess of— "(I) the cash surrender value of such contract at the time of transfer, over "(II) the investment in such contract at such time, under the contract as an amount not received as an annuity. "(ii)
EXCEPTION FOR CERTAIN TRANSFERS BETWEEN
SPOUSES OR FORMER SPOUSES.—Clause (i) shall not apply to any transfer to which section 1041(a) (relating to transfers of property between spouses or incident to divorce) applies. "(iii) ADJUSTMENT TO INVESTMENT IN CONTRACT OF TRANSFEREE.—If Under clause (i) an amount is included in the gross income of the transferor of an annuity contract, the investment in the contract of the transferee in such contract shall be increased by the amount so included."
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