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TITLE 26-INTERNAL REVENUE CODE (5) Exclusive benefit In the case of a plan to which contributions are made by more than one employer, in de- termining whether the plan is for the exclu- sive benefit of an employer's employees or their spouses or dependents, the employees of any employer who maintains the plan shall be considered to be the employees of each employer who maintains the plan. (6) Attribution rules For purposes of this section- (A) ownership of stock in a corporation shall be determined in accordance with the rules provided under subsections (d) and (e) of section 1563 (without regard to section 1563(e)(3)(C)), and (B) the interest of an employee in a trade or business which is not incorporated shall be determined in accordance with regula- tions prescribed by the Secretary, which shall be based on principles similar to the principles which apply in the case of sub- paragraph (A). (7) Time of notice to Secretary A plan shall not be a qualified group legal services plan for any period prior to the time notification was provided to the Secretary in accordance with subsection (c)(4), if such notice is given after the time prescribed by the Secretary by regulations for giving such notice. (Added Pub. L. 94-455, title XXI, § 2134(a), Oct. 4, 1976, 90 Stat. 1926.) PRIOR PROVISIONS A prior section 120, act Aug. 16, 1954, ch. 736, 68A Stat. 39, which related to statutory subsistence allowance received by police, was repealed by Pub. L. 85-866, title I, § 3(a), (c), Sept. 2, 1958, 72 Stat. 1607, effective with respect to taxable years ending after Sept. 30, 1958, but only with respect to amounts re- ceived as a statutory subsistence allowance for any day after Sept. 30, 1958. EFFECTIVE DATE Section 2134(e) of Pub. L. 94-455 provided that: "(1) In general.-Except as provided in paragraph (2), the amendments made by this section [enacting this section and section 501(c)(20) of this title] shall apply to taxable years beginning after December 31, 1976, and ending before January 1, 1982. "(2) Notice requirement.-For purposes of section 120(d)(6) of the Internal Revenue Code of 1954, [subsec. (d)(6) of this section], the time prescribed by the Secretary of the Treasury by regulations for giving the notice required by section 120(c)(4) of such Code (subsec. (c)(4) of this section] shall not expire before the 90th day after the day on which regula- tions prescribed under such section 120(c)(4) [subsec. (c)(4) of this section] first become final. "(3) Existing plans.- "(A) For purposes of section 120 of the Internal Revenue Code of 1954 [this section], a written group legal services plan which was in existence on June 4, 1976, shall be considered as satisfying the require- ments of subsections (b) and (c) of such section 120 [subsecs. (b and (c) of this section] for the period ending with the compliance date (determined under subparagraph (B)). "(B) Compliance date.-For purposes of this para- graph, the term 'compliance date' means- "(i) the date occurring 180 days after the date of the enactment of this Act [Oct. 4, 1976], or "(ii) if later, in the case of a plan which is main- tained pursuant to one or more agreements which the Secretary of Labor finds to be collective bar- gaining agreements, the earlier of December 31, 1981, or the date on which the last of the collective bargaining agreements relating to the plan termi- nates (determined without regard to any extension thereof agreed to after the date of the enactment of this Act (Oct. 4, 1976])." STUDY AND REPORT Section 2134(d) of Pub. L. 94-455 provided that: "(1) A complete study and investigation with respect to the desirability and feasibility of continuing the ex- clusion from income of certain prepaid group legal ser- vices benefits under section 120 of the Internal Rev- enue Code of 1954 [this section] shall be made by the Secretary of Labor and by the Secretary of the Trea- sury. "(2) The Secretary of Labor ani the Secretary of the Treasury shall report to the President and the Congress with respect to the study and investigation conducted under paragraph (1) not later than Decem- ber 31, 1980." SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 37, 501 of this title. § 121. Gain from sale or exchange of residence of in- dividual who has attained age 65 (a) General rule At the election of the taxpayer, gross income does not include gain from the sale or exchange of property if- (1) the taxpayer has attained the age of 65 before the date of such sale or exchange, and (2) during the 8-year period ending on the date of the sale or exchange, such property has been owned and used by the taxpayer as his principal residence for periods aggregat- ing 5 years or more. (b) Limitations (1) Where adjusted sales price exceeds $35,000 If the adjusted sales price of the property sold or exchanged exceeds $35,000, subsection (a) shall apply to that portion of the gain which bears the same ratio to the total amount of such gain as $35,000 bears to such adjusted sales price. For purposes of che pre- ceding sentence, the term "adjusted sales price" has the meaning assigned to such term by section 1034(b)(1) (determined without regard to subsection (d)(7) of this section). (2) Application to only one sale or exchange Subsection (a) shall not apply to any sale or exchange by the taxpayer if an election by the taxpayer or his spouse under subsection (a) with respect to any other sale or exchange is in effect. (c) Election An election under subsection (a) may be made or revoked at any time before the expiration of the period for making a claim for credit or refund of the tax imposed by this chapter for the taxable year in which the sale or exchange occurred, and shall be made or evoked in such manner as the Secretary shall by regulations prescribe. In the case of a taxpayer who is mar- ried, an election under subsection (a) or a revo- cation thereof may be made only if his spouse joins in such election or revocation. Page 128