77TH CONG. , 2D SESS.-CH. 619-OCT. 21 , 1942 differ from the contributions or benefits based on employee's remuneration not so excluded, or differ because of any retire- ment benefits created under State or Federal law. "(6) A plan shall be considered as meeting the requirements of paragraph (3) of this subsection during the whole of any tax- able year of the plan if on one day in each quarter it satisfied such requirements. "(b) TAXABILITY OF BENEFICIARY.-The amount actually distributed or made available to any distributee by any such trust shall be tax- able to him, in the year in which so distributed or made available, under section 22 (b) (2) as if it were an annuity the consideration for which is the amount contributed by the employee, except that if the total distributions payable with respect to any employee are paid to the distributee within one taxable year of the distributee on account of the employee's separation from the service, the amount of such distribution to the extent exceeding the amounts contributed by the employee, shall be considered a gain from the sale or exchange of a capital asset held for more than 6 months. "(c) TREATMENT OF BENEFICIARY OF TRUST NOT EXEMPT UNDER SuBsEcTION (a). - Contributions to a trust made by an employer dur- ing a taxable year of the employer which ends within or with a tax- able year of the trust for which the trust is not exempt under sec- tion 165 (a) shall be included in the gross income of an employee for the taxable year in which the contribution is made to the trust in the case of an employee whose beneficial interest in such contribution is nonforfeitable at the time the contribution is made." (b) DEDUCTION ALLOWED EMPLOYER. -Section 23 (p) (relating to deduction for amounts paid to pension trusts) is amended to read as follows: " (p) CONTRIBUTIONS OF AN EMPLOYER TO AN EMPLOYEES' TRUST OR ANNUITY PLAN AND COMPENSATION UNDER A DEFERRED-PAYMENT PLAN.- "(1) GENERAL RULE. -If contributions are paid by an employer to or under a stock bonus, pension, profit-sharing, or annuity plan, or if compensation is paid or accrued on account of any employee under a plan deferring the receipt of such compensa- tion, such contributions or compensation shall not be deductible under subsection (a) but shall be deductible, if deductible under subsection (a) without regard to this subsection, under this sub- section but only to the following extent: "(A) In the taxable year when paid, if the contributions are paid into a pension trust, and if such taxable year ends within or with a taxable year of the trust for which the trust is exempt under section 165 (a), in an amount deter- mined as follows: "(i) an amount not in excess of 5 per centum of the compensation otherwise paid or accrued during the tax- able year to all the employees under the trust, but such amount may be reduced for future years if found by the Commissioner upon periodical examinations at not less than five-year intervals to be more than the amount rea- sonably necessary to provide the remaining unfunded cost of past and current service credits of all employees under the plan, plus "(ii) any excess over the amount allowable under clause (i) necessary to provide with respect to all of the employees under the trust the remaining unfunded cost of their past and current service credits distributed as a level amount, or a level percentage of compensation, 53 Stat. 10 . 26U..C. 22(b) (2). Ante, pp. 808, 818 . Post, p. 866 . Ante, p. 862. 63 Stat. 15 . 26 U.. C.. 23 (p). Pension trust. Ante, p. 862. Determination of amount. 56 STAT.] 863
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