88 STAT. ]
PUBLIC LAW 93-406-SEPT. 2, 1974
"(iv) after the employee has become disabled (within the meaning of section 72(m)(7)) from a trust which forms a part of a plan described in section 401(a) and which is exempt from tax under section 501 or from a plan described in section 403(a). Clause (iii) of this subparagraph shall be applied only with respect to an individual who is an employee without regard to section 401 (c)(1), and clause (iv) shall be applied only with respect to an employee within the meaning of section 401(c)(1). For purposes of this subparagraph, a distribution of an annuity contract from a trust or annuity plan referred to in the first sentence of this subparagraph shall be treated as a lump sum distribution. For purposes of this subparagraph, a distribution to two or more trusts shall be treated as a distribution to one recipient.
use 4 0 1,
use 4 0 3.
" (B) ELECTION OF LUMP SUM TREATMENT.—For purposes
of this section and section 403, no amount which is not an annuity contract may be treated as a lump sum distribution under subparagraph (A) unless the taxpayer elects for the taxable year to have all such amounts received during such year so treated at the time and in the manner provided under regulations prescribed by the Secretary or his delegate. Not more than one election may be made under this subparagraph with respect to any individual after such individual has attained age 591/^. No election may be made under this subparagraph by any taxpayer other than an individual, an estate, or a trust. I n the case of a lump sum distribution made with respect to an employee to two or more trusts, the election under this subparagraph shall be made by the personal representative of the employee. " (C) AGGREGATION OF CERTAIN TRUSTS AND PLANS.—For
purposes of determining the balance to the credit of an employee under subparagraph (A) — " (i) all trusts which are part of a plan shall be treated as a single trust, all pension plans maintained by the employer shall be treated as a single plan, all profitsharing plans maintained by the employer shall be treated as a single plan, and all stock bonus plans maintained by the employer shall be treated as a single plan, and "(ii) trusts which are not qualified trusts under section 401(a) and annuity contracts which do not satisfy the requirements of section 404(a)(2) shall not be taken 26 USC 404. into account. " (D) TOTAL TAXABLE AMOUNT.—For purposes of this section and section 403, the term 'total taxable amount' means, with respect to a lump sum distribution, the amount of such distribution which exceeds the sum of— " (i) the amounts considered contributed by the employee (determined by applying section 7 2 (f)), which employee contributions shall be reduced by any amounts theretofore distributed to him which were not includible in gross income, and "(ii) the net unrealized appreciation attributable to that part of the distribution which consists of the securities of the employer corporation so distributed. " (E) ORDINARY INCOME PORTION.—For purposes of this section, the term 'ordinary income portion' means, with