1 2 3 4 5 6 mined with reference to the average useful life of the property with respect to which the credit was allowed) of the credit against tax allowed for any taxable year by section 38 of such Code, or (2) in the case of any other property, any credit against tax allowed by section 38 of such Code, 7 to reduce such taxpayer's Federal income taxes for the pur8 pose of establishing the cost of service of the taxpayer or to 9 accomplish a similar result by any other method. (f) EFFECTIVE Dates.— (1) The amendments made by subsection (b) shall apply with respect to property possession of which is transferred to a lessee on or after the date of enactment of this Act. (2) The amendments made by subsection (c) shall apply with respect to taxable years ending after June 30, 1963. (3) The amendments made by subsection (d) shall apply with respect to dispositions after December 31, 1963, in taxable years ending after such date. 1 SEC. 203 204. GROUP-TERM LIFE INSURANCE PURCHASED 2 3 4 5 6 7 8 9 10 FOR EMPLOYEES. (a) INCLUSION IN INCOME. (1) Part II of subchapter B of chapter 1 (relating to items specifically included in gross income) is amended by adding at the end thereof the following new section: "SEC. 79. GROUP-TERM LIFE INSURANCE PURCHASED FOR EMPLOYEES. 11 127 "(a) GENERAL RULE.-There shall be included in the gross income of an employce for the taxable year an amount equal to the cost of group-term life insurance on his life 13 provided for part or all of such year under a policy (or 14 policies) carried directly or indirectly by his employer (or 15 employers); but only to the extent that such cost exceeds 16 the sum of— "(1) the cost of so much of such insurance as does not exceed $30,000 of protection, and "(1) the cost of $70,000 of such insurance, and "(2) the amount (if any) paid by the employee toward the purchase of such insurance. "(b) EXCEPTIONS.-Subsection (a) shall not apply "(1) the cost of group-term life insurance on the life of an individual which is provided under a policy 1 carried directly or indirectly by an employer after such 2 individual has terminated his employment with such employer and either has reached the retirement age with respect to such employer or is disabled (within the meaning of paragraph (3) of section 213 (g), determined without regard to paragraph (4) thereof), "(2) the cost of any portion of the group-term life insurance on the life of an employee provided during part or all of the taxable year of the employee under which "(A) the employer is directly or indirectly the beneficiary, or "(B) a person described in section 170 (c) is the sole beneficiary, for the entire period during such taxable year for which the employee receives such insurance, and "(3) the cost of any group-term life insurance which is provided under a contract to which section 72 (m) (3) applies. "(e) DETERMINATION OF COST OF INSURANCE. " UNIFORM PREMIUM TABLE METHOD. For purposes of this section and chapter 24, the cost of group term life insurance on the life of an employee provided during any period shall be determined on the basis of uniform premiums (computed on the basis of 1 2 3 4 5 6 7 8 9 5 year age brackets) prescribed by regulations by the Secretary or his delegate. "(2) POLICY COST METHOD. If the employer so eleets fat such time and in such manner as the Secretary or his delegate prescribes) with respect to any employee for any period, the cost of group term life insurance on the life of such employee shall fin lieu of being determined under paragraph (1) be determined on the basis of the average premium cost under the policy for the ages included within the age bracket which would be applicable to such employee under paragraph (1). The 12 preceding sentence shall not apply for purposes of determining the cost of insurance provided under a policy if the premium on such policy is not computed on the basis of the cost of such insurance at the ages for at the 10 11 23 13 14 15 age brackets applicable under paragraph (1) of the individuals comprising the group. "(3) EMPLOYED INDIVIDUALS OVER AGE 04. In the ease of an employee who has attained age 64, the eost determined under paragraph (1) or (2), as the ease may be, shall not exceed the cost which would be determined under such paragraph with respect to such individual if he were age 63." 1 "(c) DETERMINation of Cost of Insurance.-For 2 purposes of this section and section 6052, the cost of group3 term insurance on the life of an employee provided during any 4 period shall be determined on the basis of uniform premiums 5 (computed on the basis of 5-year age brackets) prescribed by 6 regulations by the Secretary or his delegate. In the case of 7 an employee who has attained age 64, the cost prescribed 8 shall not exceed the cost with respect to such individual if he 9 were age 63." 10 11 12 13 15 16 17 18 (2) The table of sections for part II of subchapter B of chapter 1 is amended by adding at the end thereof the following: "Sec. 79. Group-term life insurance purchased for employees." (3) Section 7701 (a) (20) (defining employee) is amended by striking out "For the purpose of apply ing the provisions of sections 104" and inserting in lieu thereof "For the purpose of applying the provisions of sections 79 and 218 section 79 with respect to group term life insurance purchased for employees, for the 19 purpose of applying the provisions of section 104". 20 (b) CERTAIN CONTRIBUTIONS BY EMPLOYEES FOR |