120 26 USC 501. " Stat. 33.
PUBLIC LAW 86-69-JUNE 25, 1959
[73 S T A T.
tracts were purchased) was an organization described in section 501(c)(3) which was exempt from tax under section 501 (a) or was an organization exempt from tax under section 101(6) of the Internal Revenue Code of 1939 or the corresponding provisions of prior revenue laws. "(2) SPECIAL TRANSITIONAL RULE.—For purposes of this part, the amount taken into account as pension plan reserves shall be— " (A) in the case of a taxable year beginning after December 31, 1957, and before January 1, 1959, zero; " (B) in.the case of a taxable year beginning after December 31, 1958, and before January 1, 1960, 33i/^ percent of the amount thereof (determined without regard to this paragraph); " (C) in the case of a taxable year beginning after December 31, 1959, and before January 1, 1961, 66% percent of the amount thereof (determined without regard to this paragraph); and " (D) in the case of a taxable year beginning after December 31, 1960,100 percent of the amount thereof. "(e) INTEREST P A I D. — For purposes of this part, the interest paid for any taxable year is the sum of— "(1) INTEREST ON INDEBTEDNESS.—All interest for the taxable year on indebtedness, except on indebtedness incurred or continued to purchase or carry obligations the interest on which is wholly exempt from taxation under this chapter. "(2)
AMOUNTS I N THE NATURE OF INTEREST.—All amounts in
the nature of interest, whether or not guaranteed, for the taxable year on insurance or annuity contracts (including contracts supplementary thereto) which do not involve, at the time of accrual, life, health, or accident contingencies. "(3) DISCOUNT ON PREPAID PREMIUMS.—All amounts accrued for the taxable year for discounts in the nature of interest, whether or not guaranteed, on premiums or other consideration paid in advance on insurance or annuity contracts. " (4)
68 Stat. 740.
INTEREST ON CERTAIN SPECIAL CONTINGENCY RESERVES.—In-
terest for the taxable year on special contingency reserves established pursuant to section 8(d) of the Federal Employees' Group L^fg lusurance Act of 1954 (5 U.S.C. § 2097(d)). "SEC. 806. CERTAIN CHANGES IN RESERVES AND ASSETS. "(a)
ADJUSTMENTS TO MEANS FOR CERTAIN TRANSFERS OF LIABILI-
TIES.—For purposes of this part, if, during the taxable year, there is a change in life insurance reserves attributable to the transfer between the taxpayer and another person of liabilities under contracts taken into account in computing such reserves, then, under regulations prescribed by the Secretary or his delegate, the means of such reserves, and the mean of the assets, shall be appropriately adjusted, on a daily basis, to reflect the amounts involved in such transfer. This subsection shall not apply to reinsurance ceded to the taxpayer or to another person. " (b) CHANGE OF BASIS IN COMPUTING RESERVES.—If the basis for determining the amount of any item referred to in section 810(c) as of the close of the taxable year differs from the basis for such determination as of the beginning of the taxable year, then for purposes of this subpart the amount of such item— " (1) as of the close of the taxable year shall be computed on the old basis, and " (2) as of the beginning of the next taxable year shall be computed on the new basis.
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