Special rule
(1) Amount excluded from gross income
(1)Amount excluded from gross income#
In the case of any individual referred to in subsection (a), all amounts received as retired or retainer pay shall be excluded from gross income until there has been so excluded an amount equal to the consideration for the contract. The preceding sentence shall apply only to the extent that the amounts received would, but for such sentence, be includible in gross income.
(2)Consideration for the contract#
For purposes of paragraph (1) and section 72(n), the term “consideration for the contract” means, in respect of any individual, the sum of—
(A) the total amount of the reductions before January 1, 1966 , in his retired or retainer pay by reason of an election under chapter 73 of title 10 of the United States Code, and
(B) any amounts deposited at any time by him pursuant to section 1438 or 1452(d) of such title 10.
(2)(A)#
the total amount of the reductions before January 1, 1966 , in his retired or retainer pay by reason of an election under chapter 73 of title 10 of the United States Code, and
(2)(B)#
any amounts deposited at any time by him pursuant to section 1438 or 1452(d) of such title 10.