General rule
If—
(i)#
any portion of the balance to the credit of an employee in an employee annuity described in paragraph (1) is paid to him in an eligible rollover distribution (within the meaning of section 402(c)(4)),
(ii)#
the employee transfers any portion of the property he receives in such distribution to an eligible retirement plan, and
(iii)#
in the case of a distribution of property other than money, the amount so transferred consists of the property distributed,
then such distribution (to the extent so transferred) shall not be includible in gross income for the taxable year in which paid.