Sec. 1421. Repeal of exclusion of net unrealized appreciation in employer securities
511 words·~2 min read·
/bill/113/hr/1/ih/section-1421A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 402(e) is amended by striking paragraph (4). Section 401(k)(10) is amended by striking subparagraph
(B)and inserting the following new subparagraphs: A termination shall not be treated as described in subparagraph
(A)with respect to any employee unless the employee receives a lump sum distribution by reason of the termination. For purposes of this paragraph— The term lump sum distribution means the distribution or payment within one taxable year of the recipient of the balance to the credit of an employee which becomes payable to the recipient 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). Such term includes a distribution of an annuity contract from— a trust which forms a part of a plan described in section 401(a) and which is exempt from tax under section 501(a), or an annuity plan described in section 403(a). For purposes of this clause, a distribution to two or more trusts shall be treated as a distribution to one recipient. For purposes of determining the balance to the credit of an employee under clause (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 profit-sharing 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 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 into account. The provisions of this subparagraph shall be applied without regard to community property laws. The balance to the credit of an employee shall not include any amount payable to an alternate payee under a qualified domestic relations order (within the meaning of section 414(p)). The balance to the credit of an employee under a defined contribution plan shall not include any amount transferred from such defined contribution plan to a qualified cost-of-living arrangement (within the meaning of section 415(k)(2)) under a defined benefit plan.
(vii)If any distribution or payment of the balance to the credit of an employee would be treated as a lump-sum distribution, then, for purposes of this paragraph, the payment under a qualified domestic relations order (within the meaning of section 414(p)) of the balance to the credit of an alternate payee who is the spouse or former spouse of the employee shall be treated as a lump-sum distribution. For purposes of this clause, the balance to the credit of the alternate payee shall not include any amount payable to the employee. For purposes of this subparagraph, the balance to the credit of the employee does not include the accumulated deductible employee contributions under the plan (within the meaning of section 72(o)(5)). . Section 3405(e) is amended by striking paragraph (8). The amendments made by this section shall apply to distributions after December 31, 2014.