
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document affected by Public Law 107-134 Section 101(c)(2)]
[CITE: 26USC691]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
       Subchapter J--Estates, Trusts, Beneficiaries, and Decedents
 
                 PART II--INCOME IN RESPECT OF DECEDENTS
 
Sec. 691. Recipients of income in respect of decedents


(a) Inclusion in gross income

                          (1) General rule

        The amount of all items of gross income in respect of a decedent 
    which are not properly includible in respect of the taxable period 
    in which falls the date of his death or a prior period (including 
    the amount of all items of gross income in respect of a prior 
    decedent, if the right to receive such amount was acquired by reason 
    of the death of the prior decedent or by bequest, devise, or 
    inheritance from the prior decedent) shall be included in the gross 
    income, for the taxable year when received, of:
            (A) the estate of the decedent, if the right to receive the 
        amount is acquired by the decedent's estate from the decedent;
            (B) the person who, by reason of the death of the decedent, 
        acquires the right to receive the amount, if the right to 
        receive the amount is not acquired by the decedent's estate from 
        the decedent; or
            (C) the person who acquires from the decedent the right to 
        receive the amount by bequest, devise, or inheritance, if the 
        amount is received after a distribution by the decedent's estate 
        of such right.

                  (2) Income in case of sale, etc.

        If a right, described in paragraph (1), to receive an amount is 
    transferred by the estate of the decedent or a person who received 
    such right by reason of the death of the decedent or by bequest, 
    devise, or inheritance from the decedent, there shall be included in 
    the gross income of the estate or such person, as the case may be, 
    for the taxable period in which the transfer occurs, the fair market 
    value of such right at the time of such transfer plus the amount by 
    which any consideration for the transfer exceeds such fair market 
    value. For purposes of this paragraph, the term ``transfer'' 
    includes sale, exchange, or other disposition, or the satisfaction 
    of an installment obligation at other than face value, but does not 
    include transmission at death to the estate of the decedent or a 
    transfer to a person pursuant to the right of such person to receive 
    such amount by reason of the death of the decedent or by bequest, 
    devise, or inheritance from the decedent.

     (3) Character of income determined by reference to decedent

        The right, described in paragraph (1), to receive an amount 
    shall be treated, in the hands of the estate of the decedent or any 
    person who acquired such right by reason of the death of the 
    decedent, or by bequest, devise, or inheritance from the decedent, 
    as if it had been acquired by the estate or such person in the 
    transaction in which the right to receive the income was originally 
    derived and the amount includible in gross income under paragraph 
    (1) or (2) shall be considered in the hands of the estate or such 
    person to have the character which it would have had in the hands of 
    the decedent if the decedent had lived and received such amount.

         (4) Installment obligations acquired from decedent

        In the case of an installment obligation reportable by the 
    decedent on the installment method under section 453, if such 
    obligation is acquired by the decedent's estate from the decedent or 
    by any person by reason of the death of the decedent or by bequest, 
    devise, or inheritance from the decedent--
            (A) an amount equal to the excess of the face amount of such 
        obligation over the basis of the obligation in the hands of the 
        decedent (determined under section 453B) shall, for the purpose 
        of paragraph (1), be considered as an item of gross income in 
        respect of the decedent; and
            (B) such obligation shall, for purposes of paragraphs (2) 
        and (3), be considered a right to receive an item of gross 
        income in respect of the decedent, but the amount includible in 
        gross income under paragraph (2) shall be reduced by an amount 
        equal to the basis of the obligation in the hands of the 
        decedent (determined under section 453B).

         (5) Other rules relating to installment obligations

        (A) In general

            In the case of an installment obligation reportable by the 
        decedent on the installment method under section 453, for 
        purposes of paragraph (2)--
                (i) the second sentence of paragraph (2) shall be 
            applied by inserting ``(other than the obligor)'' after ``or 
            a transfer to a person'',
                (ii) any cancellation of such an obligation shall be 
            treated as a transfer, and
                (iii) any cancellation of such an obligation occurring 
            at the death of the decedent shall be treated as a transfer 
            by the estate of the decedent (or, if held by a person other 
            than the decedent before the death of the decedent, by such 
            person).

        (B) Face amount treated as fair market value in certain cases

            In any case to which the first sentence of paragraph (2) 
        applies by reason of subparagraph (A), if the decedent and the 
        obligor were related persons (within the meaning of section 
        453(f)(1)), the fair market value of the installment obligation 
        shall be treated as not less than its face amount.

        (C) Cancellation includes becoming unenforceable

            For purposes of subparagraph (A), an installment obligation 
        which becomes unenforceable shall be treated as if it were 
        canceled.

(b) Allowance of deductions and credit

    The amount of any deduction specified in section 162, 163, 164, 212, 
or 611 (relating to deductions for expenses, interest, taxes, and 
depletion) or credit specified in section 27 (relating to foreign tax 
credit), in respect of a decedent which is not properly allowable to the 
decedent in respect of the taxable period in which falls the date of his 
death, or a prior period, shall be allowed:

                  (1) Expenses, interest, and taxes

        In the case of a deduction specified in sections 162, 163, 164, 
    or 212 and a credit specified in section 27, in the taxable year 
    when paid--
            (A) to the estate of the decedent; except that
            (B) if the estate of the decedent is not liable to discharge 
        the obligation to which the deduction or credit relates, to the 
        person who, by reason of the death of the decedent or by 
        bequest, devise, or inheritance acquires, subject to such 
        obligation, from the decedent an interest in property of the 
        decedent.

                            (2) Depletion

        In the case of the deduction specified in section 611, to the 
    person described in subsection (a)(1)(A), (B), or (C) who, in the 
    manner described therein, receives the income to which the deduction 
    relates, in the taxable year when such income is received.

(c) Deduction for estate tax

                     (1) Allowance of deduction

        (A) General rule

            A person who includes an amount in gross income under 
        subsection (a) shall be allowed, for the same taxable year, as a 
        deduction an amount which bears the same ratio to the estate tax 
        attributable to the net value for estate tax purposes of all the 
        items described in subsection (a)(1) as the value for estate tax 
        purposes of the items of gross income or portions thereof in 
        respect of which such person included the amount in gross income 
        (or the amount included in gross income, whichever is lower) 
        bears to the value for estate tax purposes of all the items 
        described in subsection (a)(1).

        (B) Estates and trusts

            In the case of an estate or trust, the amount allowed as a 
        deduction under subparagraph (A) shall be computed by excluding 
        from the gross income of the estate or trust the portion (if 
        any) of the items described in subsection (a)(1) which is 
        properly paid, credited, or to be distributed to the 
        beneficiaries during the taxable year.

                  (2) Method of computing deduction

        For purposes of paragraph (1)--
            (A) The term ``estate tax'' means the tax imposed on the 
        estate of the decedent or any prior decedent under section 2001 
        or 2101, reduced by the credits against such tax.
            (B) The net value for estate tax purposes of all the items 
        described in subsection (a)(1) shall be the excess of the value 
        for estate tax purposes of all the items described in subsection 
        (a)(1) over the deductions from the gross estate in respect of 
        claims which represent the deductions and credit described in 
        subsection (b). Such net value shall be determined with respect 
        to the provisions of section 421(c)(2), relating to the 
        deduction for estate tax with respect to stock options to which 
        part II of subchapter D applies.
            (C) The estate tax attributable to such net value shall be 
        an amount equal to the excess of the estate tax over the estate 
        tax computed without including in the gross estate such net 
        value.

         (3) Special rule for generation-skipping transfers

        In the case of any tax imposed by chapter 13 on a taxable 
    termination or a direct skip occurring as a result of the death of 
    the transferor, there shall be allowed a deduction (under principles 
    similar to the principles of this subsection) for the portion of 
    such tax attributable to items of gross income of the trust which 
    were not properly includible in the gross income of the trust for 
    periods before the date of such termination.

            (4) Coordination with capital gain provisions

        For purposes of sections 1(h), 1201, 1202, and 1211, the amount 
    of any gain taken into account with respect to any item described in 
    subsection (a)(1) shall be reduced (but not below zero) by the 
    amount of the deduction allowable under paragraph (1) of this 
    subsection with respect to such item.

(d) Amounts received by surviving annuitant under joint and survivor 
        annuity contract

                    (1) Deduction for estate tax

        For purposes of computing the deduction under subsection 
    (c)(1)(A), amounts received by a surviving annuitant--
            (A) as an annuity under a joint and survivor annuity 
        contract where the decedent annuitant died after December 31, 
        1953, and after the annuity starting date (as defined in section 
        72(c)(4)), and
            (B) during the surviving annuitant's life expectancy period, 
        shall, to the extent included in gross income under section 72, 
        be considered as amounts included in gross income under 
        subsection (a).

                (2) Net value for estate tax purposes

        In determining the net value for estate tax purposes under 
    subsection (c)(2)(B) for purposes of this subsection, the value for 
    estate tax purposes of the items described in paragraph (1) of this 
    subsection shall be computed--
            (A) by determining the excess of the value of the annuity at 
        the date of the death of the deceased annuitant over the total 
        amount excludable from the gross income of the surviving 
        annuitant under section 72 during the surviving annuitant's life 
        expectancy period, and
            (B) by multiplying the figure so obtained by the ratio which 
        the value of the annuity for estate tax purposes bears to the 
        value of the annuity at the date of the death of the deceased.

                           (3) Definitions

        For purposes of this subsection--
            (A) The term ``life expectancy period'' means the period 
        beginning with the first day of the first period for which an 
        amount is received by the surviving annuitant under the contract 
        and ending with the close of the taxable year with or in which 
        falls the termination of the life expectancy of the surviving 
        annuitant. For purposes of this subparagraph, the life 
        expectancy of the surviving annuitant shall be determined, as of 
        the date of the death of the deceased annuitant, with reference 
        to actuarial tables prescribed by the Secretary.
            (B) The surviving annuitant's expected return under the 
        contract shall be computed, as of the death of the deceased 
        annuitant, with reference to actuarial tables prescribed by the 
        Secretary.

(e) Cross reference

            For application of this section to income in respect of a 
        deceased partner, see section 753.

(Aug. 16, 1954, ch. 736, 68A Stat. 235; Pub. L. 88-272, title II, 
Sec. 221(c)(2), Feb. 26, 1964, 78 Stat. 75; Pub. L. 88-570, Sec. 1, 
Sept. 2, 1964, 78 Stat. 854; Pub. L. 94-455, title XIX, 
Secs. 1901(a)(91), 1906(b)(13)(A), 1951(b)(10)(A), title XX, 
Secs. 2005(a)(4), 2006(b)(3), Oct. 4, 1976, 90 Stat. 1779, 1834, 1839, 
1876, 1889; Pub. L. 95-600, title VII, Sec. 702(b)(1), Nov. 6, 1978, 92 
Stat. 2925; Pub. L. 96-222, title I, Sec. 101(a)(8)(A), Apr. 1, 1980, 94 
Stat. 201; Pub. L. 96-223, title IV, Sec. 401(a), Apr. 2, 1980, 94 Stat. 
299; Pub. L. 96-471, Secs. 2(b)(5), 3, Oct. 19, 1980, 94 Stat. 2254; 
Pub. L. 97-34, title IV, Sec. 403(a)(2)(C), Aug. 13, 1981, 95 Stat. 301; 
Pub. L. 98-369, div. A, title IV, Sec. 474(r)(18), July 18, 1984, 98 
Stat. 843; Pub. L. 99-514, title III, Sec. 301(b)(8), title XIV, 
Sec. 1432(a)(3), Oct. 22, 1986, 100 Stat. 2217, 2729; Pub. L. 100-203, 
title X, Sec. 10202(c)(3), Dec. 22, 1987, 101 Stat. 1330-392; Pub. L. 
100-647, title I, Sec. 1011A(g)(10), Nov. 10, 1988, 102 Stat. 3482; Pub. 
L. 101-239, title VII, Sec. 7841(d)(3), Dec. 19, 1989, 103 Stat. 2428; 
Pub. L. 101-508, title XI, Sec. 11101(d)(4), Nov. 5, 1990, 104 Stat. 
1388-405; Pub. L. 102-318, title V, Sec. 521(b)(27), July 3, 1992, 106 
Stat. 312; Pub. L. 103-66, title XIII, Sec. 13113(d)(4), Aug. 10, 1993, 
107 Stat. 430; Pub. L. 104-188, title I, Secs. 1401(b)(9), 1704(t)(73), 
Aug. 20, 1996, 110 Stat. 1789, 1891; Pub. L. 105-34, title X, 
Sec. 1073(b)(1), Aug. 5, 1997, 111 Stat. 948.)


                               Amendments

    1997--Subsec. (c)(1)(C). Pub. L. 105-34 struck out heading and text 
of subpar. (C). Text read as follows: ``For purposes of this subsection, 
no deduction shall be allowed for the portion of the estate tax 
attributable to the increase in such tax under section 4980A(d).''
    1996--Subsec. (c)(5). Pub. L. 104-188, Sec. 1704(t)(73), provided 
that section 521(b)(27) of Pub. L. 102-318 shall be applied as if 
``Section 691(c)(5)'' appeared instead of ``Section 691(c)''. See 1992 
Amendment note below.
    Pub. L. 104-188, Sec. 1401(b)(9), struck out par. (5) which read as 
follows:
    ``(5) Coordination with section 402(d).--For purposes of section 
402(d) (other than paragraph (1)(C) thereof), the total taxable amount 
of any lump sum distribution shall be reduced by the amount of the 
deduction allowable under paragraph (1) of this subsection which is 
attributable to the total taxable amount (determined without regard to 
this paragraph).''
    1993--Subsec. (c)(4). Pub. L. 103-66 inserted ``1202,'' after 
``1201,''.
    1992--Subsec. (c)(5). Pub. L. 102-318, which directed that section 
691(c) be amended ``in the text and heading'' by substituting ``402(d)'' 
for ``402(e)'', was executed by making the substitution in subsec. 
(c)(5). See 1996 Amendment note above.
    1990--Subsec. (c)(4). Pub. L. 101-508 substituted ``1(h)'' for 
``1(j)''.
    1989--Subsec. (c)(5). Pub. L. 101-239 substituted ``paragraph 
(1)(C)'' for ``paragraph (1)(D)''.
    1988--Subsec. (c)(1)(C). Pub. L. 100-647 added subpar. (C).
    1987--Subsec. (a)(4), (5)(A). Pub. L. 100-203 struck out ``or 453A'' 
after ``section 453''.
    1986--Subsec. (c)(3). Pub. L. 99-514, Sec. 1432(a)(3), amended par. 
(3) generally. Prior to amendment, par. (3) read as follows: ``For 
purposes of this section--
        ``(A) the tax imposed by section 2601 or any State inheritance 
    tax described in section 2602(c)(5)(B) on any generation-skipping 
    transfer shall be treated as a tax imposed by section 2001 on the 
    estate of the deemed transferor (as defined in section 2612(a));
        ``(B) any property transferred in such a transfer shall be 
    treated as if it were included in the gross estate of the deemed 
    transferor at the value of such property taken into account for 
    purposes of the tax imposed by section 2601; and
        ``(C) under regulations prescribed by the Secretary, any item of 
    gross income subject to the tax imposed under section 2601 shall be 
    treated as income described in subsection (a) if such item is not 
    properly includible in the gross income of the trust on or before 
    the date of the generation-skipping transfer (within the meaning of 
    section 2611(a)) and if such transfer occurs at or after the death 
    of the deemed transferor (as so defined).''
    Subsec. (c)(4). Pub. L. 99-514, Sec. 301(b)(8), substituted 
``capital gain provisions'' for ``capital gain deduction, etc.'' in 
heading and in text substituted ``1(j), 1201, and 1211'' for ``1201, 
1202, and 1211, and for purposes of section 57(a)(9)''.
    1984--Subsec. (b). Pub. L. 98-369 substituted ``section 27'' for 
``section 33'' in provisions preceding par. (1) and in provisions of 
par. (1) preceding subpar. (A).
    1981--Subsec. (c)(3)(A). Pub. L. 97-34 substituted ``section 
2602(c)(5)(B)'' for ``section 2602(c)(5)(C)''.
    1980--Subsec. (a)(4). Pub. L. 96-471, Sec. 2(b)(5), substituted 
``reportable by the decedent on the installment method under section 453 
or 453A'' for ``received by a decedent on the sale or other disposition 
of property, the income from which was properly reportable by the 
decedent on the installment basis under section 453'' in text preceding 
subpar. (A) and ``section 453B'' for ``section 453(d)'' in subpars. (A) 
and (B).
    Subsec. (a)(5). Pub. L. 96-471, Sec. 3, added par. (5).
    Subsec. (c)(2)(A), (C). Pub. L. 96-223 repealed the amendments made 
by Pub. L. 94-455, Sec. 2005(a)(4). See 1976 Amendment notes below.
    Subsec. (c)(5). Pub. L. 96-222 added par. (5).
    1978--Subsec. (c)(4). Pub. L. 95-600 added par. (4).
    1976--Subsec. (c)(1)(B). Pub. L. 94-455, Sec. 1901(a)(91), struck 
out provision that this subparagraph applies to same taxable years, and 
to same extent, as is provided in section 683 of this title.
    Subsec. (c)(2)(A). Pub. L. 94-455, Sec. 2005(a)(4)(A), substituted 
``Federal and State estate taxes (within the meaning of section 
1023(f)(3))'' for ``the tax imposed on the estate of the decedent or any 
prior decedent under section 2001 or 2101, reduced by the credits 
against such tax''. See Repeals note below.
    Subsec. (c)(2)(C). Pub. L. 94-455, Sec. 2005(a)(4)(B), substituted 
``which bears the same ratio to the estate tax as such net value bears 
to the value of the gross estate'' for ``equal to the excess of the 
estate tax over the estate tax computed without including in the gross 
estate such net value''. See Repeals note below.
    Subsec. (c)(3). Pub. L. 94-455, Sec. 2006(b)(3), added par. (3).
    Subsec. (d)(3)(A), (B). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck 
out ``or his delegate'' after ``Secretary''.
    Subsecs. (e), (f). Pub. L. 94-455, Sec. 1951(b)(10)(A), redesignated 
subsec. (f) as (e) and struck out former subsec. (e) relating to certain 
installment obligations transmitted at death.
    1964--Subsec. (c)(2)(B). Pub. L. 88-272 substituted ``421(c)(2), 
relating to the deduction for estate tax with respect to stock options 
to which part II of subchapter D applies'' for ``421(d)(6)(B), relating 
to the deduction for estate tax with respect to restricted stock 
options''.
    Subsecs. (e), (f). Pub. L. 88-570 added subsec. (e) and redesignated 
former subsec. (e) as (f).


                    Effective Date of 1997 Amendment

    Amendment by Pub. L. 105-34 applicable to estates of decedents dying 
after Dec. 31, 1996, see section 1073(c) of Pub. L. 105-34, set out as 
an Effective Date of Repeal note under section 4980A of this title.


                    Effective Date of 1996 Amendment

    Amendment by section 1401(b)(9) of Pub. L. 104-188 applicable to 
taxable years beginning after Dec. 31, 1999, with retention of certain 
transition rules, see section 1401(c) of Pub. L. 104-188, set out as a 
note under section 402 of this title.


                    Effective Date of 1993 Amendment

    Amendment by Pub. L. 103-66 applicable to stock issued after Aug. 
10, 1993, see section 13113(e) of Pub. L. 103-66, set out as a note 
under section 53 of this title.


                    Effective Date of 1992 Amendment

    Amendment by Pub. L. 102-318 applicable to distributions after Dec. 
31, 1992, see section 521(e) of Pub. L. 102-318, set out as a note under 
section 402 of this title.


                    Effective Date of 1990 Amendment

    Amendment by Pub. L. 101-508 applicable to taxable years beginning 
after Dec. 31, 1990, see section 11101(e) of Pub. L. 101-508, set out as 
a note under section 1 of this title.


                    Effective Date of 1988 Amendment

    Amendment by Pub. L. 100-647 effective, except as otherwise 
provided, as if included in the provision of the Tax Reform Act of 1986, 
Pub. L. 99-514, to which such amendment relates, see section 1019(a) of 
Pub. L. 100-647, set out as a note under section 1 of this title.


                    Effective Date of 1987 Amendment

    Amendment by Pub. L. 100-203 applicable to dispositions in taxable 
years beginning after Dec. 31, 1987, with special rules for non-dealers 
and coordination with Tax Reform Act of 1986, see section 10202(e)(1), 
(3), (5) of Pub. L. 100-203, set out as a note under section 453 of this 
title.


                    Effective Date of 1986 Amendment

    Amendment by section 301(b)(8) of Pub. L. 99-514 applicable to 
taxable years beginning after Dec. 31, 1986, see section 301(c) of Pub. 
L. 99-514, set out as a note under section 62 of this title.
    Amendment by section 1432(a)(3) of Pub. L. 99-514 applicable to 
generation-skipping transfers (within the meaning of section 2611 of 
this title) made after Oct. 22, 1986, except as otherwise provided, see 
section 1433 of Pub. L. 99-514, set out as an Effective Date note under 
section 2601 of this title.


                    Effective Date of 1984 Amendment

    Amendment by Pub. L. 98-369 applicable to taxable years beginning 
after Dec. 31, 1983, and to carrybacks from such years, see section 
475(a) of Pub. L. 98-369, set out as a note under section 21 of this 
title.


                    Effective Date of 1981 Amendment

    Amendment by Pub. L. 97-34 applicable to estates of decedents dying 
after Dec. 31, 1981, but inapplicable under certain conditions under 
will executed before date which is 30 days after Aug. 13, 1981, or under 
trust created by such date, see section 403(e) of Pub. L. 97-34, set out 
as a note under section 2056 of this title.


       Effective Date of 1980 Amendments and Revival of Prior Law

    For effective date of amendment by section 2(b)(5) of Pub. L. 96-
471, see section 6(a)(1) of Pub. L. 96-471, set out as an Effective Date 
note under section 453 of this title.
    Section 6(b) of Pub. L. 96-471 provided: ``The amendment made by 
section 3 [amending this section] shall apply in the case of decedents 
dying after the date of the enactment of this Act [Oct. 19, 1980].''
    Amendment by Pub. L. 96-223 (repealing section 2005(a)(4) of Pub. L. 
94-455 and the amendments made thereby, which had amended this section) 
applicable in respect of decedents dying after Dec. 31, 1976, and except 
for certain elections, this title to be applied and administered as if 
those repealed provisions had not been enacted, see section 401(b), (e) 
of Pub. L. 96-223, set out as a note under section 1023 of this title.
    Section 101(b)(1)(D) of Pub. L. 96-222 provided that: ``The 
amendment made by subsection (a)(7) [probably means subsection (a)(8), 
which amended this section and section 2039 of this title] shall apply 
with respect to the estates of decedents dying after the date of the 
enactment of this Act [Apr. 1, 1980].''


                    Effective Date of 1978 Amendment

    Section 702(b)(2) of Pub. L. 95-600 provided that: ``The amendment 
made by paragraph (1) [amending this section] shall apply with respect 
to decedents dying after the date of the enactment of this Act [Nov. 6, 
1978].''


                    Effective Date of 1976 Amendment

    Amendment by section 1901(a)(91) of Pub. L. 94-455 effective for 
taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. 
L. 94-455, set out as a note under section 2 of this title.
    Amendment by section 1951(b)(10)(A) of Pub. L. 94-455 effective for 
taxable years beginning after Dec. 31, 1976, see section 1951(d) of Pub. 
L. 94-455, set out as a note under section 72 of this title.
    Amendment by section 2005(a)(4)(A), (B) of Pub. L. 94-455 applicable 
in respect of decedents dying after Dec. 31, 1979, see section 
2005(f)(1) of Pub. L. 94-455, set out as a note under section 1015 of 
this title.
    For effective date of amendment by section 2006(b)(3) of Pub. L. 94-
455, see section 2006(c) of Pub. L. 94-455, set out as an Effective Date 
note under section 2601 of this title.


                    Effective Date of 1964 Amendment

    Amendment by Pub. L. 88-272 applicable to taxable years ending after 
Dec. 31, 1963, see section 221(e) of Pub. L. 88-272, set out as a note 
under section 421 of this title.


                                 Repeals

    Pub. L. 94-455, Sec. 2005(a)(4), cited as a credit to this section, 
and the amendments made thereby, were repealed by Pub. L. 96-223, title 
IV, Sec. 401(a), 94 Stat. 299, resulting in the text of this section 
reading as it read prior to enactment of section 2005(a)(4). See 
Effective Date of 1980 Amendments and Revival of Prior Law note above.


                            Savings Provision

    Section 1951(b)(10)(B) of Pub. L. 94-455 provided that: 
``Notwithstanding subparagraph (A) [amending this section], any election 
made under section 691(e) to have subsection (a)(4) of such section 
apply in the case of an installment obligation shall continue to be 
effective with respect to taxable years beginning after December 31, 
1976. Section 691(c) shall not apply in respect of any amount included 
in gross income by reason of the preceding sentence. The liability under 
bond filed under section 44(d) of the Internal Revenue Code of 1939 (or 
corresponding provisions of prior law) in respect of which such an 
election applies is hereby released with respect to taxable years to 
which such election applies.''


           Plan Amendments Not Required Until January 1, 1998

    For provisions directing that if any amendments made by subtitle D 
[Secs. 1401-1465] of title I of Pub. L. 104-188 require an amendment to 
any plan or annuity contract, such amendment shall not be required to be 
made before the first day of the first plan year beginning on or after 
Jan. 1, 1998, see section 1465 of Pub. L. 104-188, set out as a note 
under section 401 of this title.


           Plan Amendments Not Required Until January 1, 1994

    For provisions directing that if any amendments made by subtitle B 
[Secs. 521-523] of title V of Pub. L. 102-318 require an amendment to 
any plan, such plan amendment shall not be required to be made before 
the first plan year beginning on or after Jan. 1, 1994, see section 523 
of Pub. L. 102-318, set out as a note under section 401 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 67, 220, 221, 421, 453B, 
753, 1014, 1038, 1245, 1250, 1367 of this title.
