89 STAT. 3 8
Ante, p. 26.
26 USC 46 note.
PUBLIC LAW 94-12—MAR. 29, 1975 is applicable (without regard to this paragraph), paragraph (1) shall apply unless the taxpayer elects (in such manner as the Secretary or his delegate shall prescribe) within 90 days after the date of the enactment of the T a x Reduction Act of 1975 to have the provisions of paragraph (2) apply. The provisions of this paragraph shall not be applied to disallow such excess credit before the first final determination which is inconsistent with such requirements is made, determined in the same manner as under paragraph (4)." (4) EFFECTIVE DATES.—The amendment made by paragraph (1) of this subsection shall apply to property placed in service after January 21, 1975, in taxable years ending after January 21, 1975. The amendments made by paragraph s (2) and (3) shall apply to taxable years ending after December 31, 1974. (c) INCREASE F R O M $50,000 TO $100,000 OF DOLLAR LIMITATION ON USED PROPERTY.—
26 USC 48. 26 USC 38.
26 USC 48 note. 26 USC 46 note.
Employee stock ownership plan.
26 USC 4975.
Ante, p. 36.
(1) IN GENERAL.—Paragraph (2) of subsection 48(c) (relating to dollar limitation in case of used section 38 property) is amended— (A) by striking out "$50,000" each place i t appears and inserting in lieu thereof "$100,000", and (B) by striking out "$25,000" and inserting in lieu thereof "$50,000". (£) EFFECTIVE DATE.—The amendments made by paragraph (1) shall apply only to taxable years beginning after December 31, 1974, and before January 1, 1977. (d)
P L A N REQUIREMENTS FOR TAXPAYERS ELECTING 1 1 - P E R C E N T
CREDIT.—In order to meet the requirements of this subsection— ^^^ j ^ corporation (hereinafter in this subsection referred to as ^j^g "employer") must establish an employee stock ownership plan (described in paragraph (2)) which is funded by transfers of employer securities in accordance with the provisions of paragraph (6) and which meets all other requirements of this subsection. (2) The plan referred to in paragraph (I) must be a defined contribution plan established in writing which— (A) is a stock bonus plan, a stock bonus and a money purchase pension plan, or a profit-sharing plan, (B) is designed to invest primarily in employer securities, and (C) meets such other requirements (similar to requirements applicable to employee stock ownership plans as defined in section 4975(e)(7) of the I n t e r n a l Revenue Code of 1954) as the Secretary of the Treasury or his delegate may prescribe. (3) The plan must provide for the allocation of all employer securities transferred to it or purchased by it (because of the requirements of section 4 6 (a)(1)(B) of the I n t e r n a l Revenue Code of 1954) to the account of each participant (who was a participant at any time during the plan year, whether or not he is a participant a t the close of the plan year) as of the close of each plan year in an amount which bears substantially the same proportion to the amount of all such securities allocated to all participants in the plan for that plan year as the amount of compensation paid to such participant (disregarding any compensation in excess of the first $100,000 per year) bears to the compensation paid to all such participants during that year (disregarding any compensation in excess of the first $100,000 with respect to any part i c i p a n t).
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