63 STAT.] 81ST CONG. , IST SESS. -CH. 720-OCT. 25 , 1949 was registered), the tax under section 1802 (b) of the Internal Revenue Code shall not be imposed upon any delivery or transfer of stock from the executor or administrator of such nominee to such corporation if such delivery or transfer is made on or before the date of the enact- ment of this Act or within one year after such date. SEC. 5 . EMPLOYEE ANNUITY CONTRACTS. (a) Section 165 of the Internal Revenue Code (relating to employees trusts) is hereby amended by adding at the end thereof the following new subsection: "(d) CERTAIN EMPLOYEES' ANNUITIES.- Notwithstanding subsec- tion (c) or any other provision of this chapter, a contribution to a trust by an employer shall not be included in the income of the employee in the year in which the contribution is made if- "(1) such contribution is to be applied by the trustee for the purchase of annuity contracts for the benefit of such employee; "(2) such contribution is made to the trustee pursuant to a written agreement entered into prior to October 21, 1942, between the employer and the trustee, or between the employer and the employee; and " (3) under the terms of the trust agreement the employee is not entitled during his lifetime, except with the consent of the trustee, to any payments under annuity contracts purchased by the trustee other than annuity payments. The amount so contributed by the employer shall not constitute con- sideration paid by the employee for such annuity contract in deter- mining the amount of annuity payments required to be included in his gross income under section 22 (b) (2); except that if the tax imposed by this chapter for any taxable year beginning before January 1, 1949, has been paid by the employee with respect to such contribution for such year, and not credited or refunded, the amount so contributed for such year shall constitute consideration paid by the employee for such annuity contract. This subsection shall have no application with respect to amounts contributed to a trust after June 1, 1949, if the trust on such date was exempt under subsection (a). For the purposes of this subsection, amounts paid by an employer for the purchase of annuity contracts which are transferred to the trustee shall be deemed to be contributions made to a trust or trustee and contributions applied by the trustee for the purchase of annuity contracts; the term 'annuity contracts purchased by the trustee' shall include annuity contracts so purchased by the employer and transferred to the trustee; and the term 'employee' shall include only a person who was in the employ of the employer, and was covered by the agreement referred to in paragraph (2), prior to October 21, 1942." (b) The amendment made by subsection (a) shall be applicable to taxable years beginning after December 31, 1938. SEC. 6. RELINQUISHMENT OF POWERS IN CASE OF RECIPROCAL TRUSTS. (a) Section 1000 of the Internal Revenue Code (relating to imposi- tion of gift tax) is hereby amended by adding at the end thereof the following new subsection: "(g) CERTAIN RECIPROCAL TRUSTS.- In the case of property in a trust created prior to January 1, 1940, if and to the extent that such property may be deemed to have been transferred to such trust by a person other than the nominal grantor of such property (by reason of the fact that such person has made a reciprocal transfer of property in trust), then a relinquishment by such person on or before December 31, 1950, of any power over such property or over the income there- from shall not be deemed a transfer of property for the purposes of 893 53 Stat. 196. 26 U. S. C., Supp. II, §1802 (b). 53 Stat. 67 . 26U.S.C.§165. 53 Stat. 10 . 26 U. S.C . §22(b)(2). "A rnnUtllv contrLa'ts lHlrLe'dbtli hyIhetrtL- th' ." "Employee." 53 Stat. 144. 26 U. S. C. §1000; Supp. II, § 1000.
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