PUBLIC LAW 95-600—NOV. 6, 1978
92 STAT. 2807
"(iii) DESIGNATION WHERE AMOUNT OF DISTRIBUTION
EXCEEDS ROLLOVER CONTRIBUTION.—In any CESG whcre part or all of the distribution consists of property other than money, the taxpayer many designate— "(I) the portion of the money or other property which is to be treated as attributable to employee contributions, and "(11) the portion of the money or other property which is to be treated as included in the rollover contribution. Any designation under this clause for a taxable year shall be made not later than the time prescribed by law for filing the return for such taxable year (including extensions thereof). Any such designation, once made, shall be irrevocable. "(iv) TREATMENT WHERE NO DESIGNATION.—In
any
case where part or all of the distribution consists of property other than money and the taxpayer fails to make a designation under clause (iii) within the time provided therein, then— "(I) the portion of the money or other property which is to be treated as attributable to employee contributions, and "(II) the portion of the money or other property which is to be treated as included in the rollover contribution shall be determined on a ratable basis. "(v) NONRECOGNITION OF GAIN OR LOSS.—In the case of any sale described in clause (i), to the extent that an amount equal to the proceeds is transferred pursuant to paragraph (5)(B) or (7)(B) (as the case by be), neither gain nor loss on such sale shall be recognized." (2) EFFECTIVE DATE.—The amendment made by paragraph (1) 26 USC 402 shall apply to qualifying rollover distributions (as defined in "o*^section 402(a)(5)(D)(i) of the Internal Revenue Code of 1954) Ante, p. 2806. completed after December 31, 1978, in taxable years ending after such date, (g) DISTRIBUTION FROM EMPLOYEES' QUALIFIED PLAN OR ANNUITY TO SPOUSE MAY B E ROLLOVER CONTRIBUTION TO AN INDIVIDUAL RETIREMENT PLAN.— (1) ROLLOVERS FROM QUALIFIED EMPLOYEES' TRUST.—Subsection 26 USC 402.
(a) of section 402 (relating to taxability of beneficiary of exempt trust) is amended by adding at the end thereof the following new paragraph: "(7) ROLLOVER WHERE SPOUSE RECEIVES LUMP-SUM DISTRIBUTION AT DEATH OF EMPLOYEE.— "(A) GENERAL RULE.—If—
"(i) any portion of a lump-sum distribution from a qualified trust is paid to the spouse of the employee on account of the employee's death, "(ii) the spouse transfers any portion of the property which the spouse receives in such distribution to an individual retirement plan, and "(iii) in the case of a distribution of property other than money, the amount so transferred consists of the property distributed,
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