590
PUBLIC LAW 91-172-DEC. 30, 1969
68A Stat 309.
Post. p. 710.
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•'(f) HOLDING PERIOD.—In determining the period for which tK taxpayer has held property to which subsection (a) applies, there sh 1 ^ be included only the period beginning at the first time his rights in s^ v! property are transferable or are not subject to a substantial risk i forfeiture, whichever occurs earlier. (g) CERTAIN EXCHANGES.—If property to which subsection (^\ applies is exchanged for property subject to restrictions and condition substantially similar to those to which the property given in such exchange was subject, and if section 354, 355, 356, or 1036 (or so mucli of section 1031 as relates to section 1036) applied to such exchange or if such exchange was pursuant to the exercise of a convers'ior privilege— "(1) such exchange shall be disregarded for purposes of subsection (a), and " (2) the property received shall be treated as property to which subsection (a) applies.
- '(h) DEDUCTION BY EMPLOYER.—In the case of a transfer of property to which this section applies or a cancellation of a restriction
described in subsection (d), there shall be allowed as a deduction under section 162, to the person for whom were performed the services in connection with which such property was transferred, an amount equal to the amount included under subsection (a), (b), or (d)(2) in the gross income of the person who performed such services. Such deduction shall be allowed for the taxable year of such person in which or with which ends the taxable year in which such amount is included in the gross income of the person who performed such services. " (i) TRANSITION RULES.—This section shall apply to property transferred after June 30, 1969, except that this section shall not apply to property transferred— (1) pursuant to a binding written contract entered into before April 22, 1969, "(2) upon the exercise of an option granted before April 22, 1969, "(3) before May 1, 1970, pursuant to a written plan adopted and approved before July 1, 1969, "(4) before January 1, 1973, upon the exercise of an option granted pursuant to a binding written contract entered into before April 22, 1969, between a corporation and the transferor requiring the transferor to grant options to employees of such corporation (or a subsidiary of such corporation) to purchase a determinable number of shares of stock of such corporation, but only if the transferee was an employee of such corporation (or a subsidiary of such corporation) on or before April 22, 1969, or "(5) in exchange for (or pursuant to the exercise of a conversion privilege contained in) property transferred before July Ij 1969, or for property to which this section does not apply (by reason of paragraphs (1), (2), (3), or (4)), if section 354, 355, 356, or 1036 (or so much of section 1031 as relates to section 1036) V applies, or if gain or loss is not otherwise required to be recogr- nized upon the exercise of such conversion privilege, and if the property received in such exchange is subject to restrictions and
> conditions substantially similar to those to which the property given in such exchange was subject." (b)
68A Stat. 136. 26 USC 402.
[335^^
NONEXEMPT TRUSTS AND NONQUALIFIED ANNUITIES.— (1) BENEFICIARY OF NONEXEMPT TRUST.—Section 402(b)
(relat^j^g ^Q taxability of beneficiary of nonexempt trust) is amended to read as follows:
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