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TITLE 26-INTERNAL REVENUE CODE under section 501(a), so much of the total taxable amount (as defined in subparagraph (D) of subsection (e)(4)) of a lump sum distri- bution as is equal to the product of such total taxable amount multiplied by a fraction- (A) the numerator of which is the number of calendar years of active participation by the employee in such plan before January 1, 1974, and (B) the denominator of which is the number of calendar years of active partici- pation by the employee in such plan, shall be treated as a gain from the sale or ex- change of a capital asset held for more than 9 months. For purposes of computing the frac- tion described in this paragraph and the frac- tion under subsection (e)(4)(E), the Secretary may prescribe regulations under which plan years may be used in lieu of calendar years. For purposes of this paragraph, in the case of an individual who is an employee without regard to section 401(c)(1), determination of whether or not any distribution is a lump sum distribution shall be made without regard to the requirement that an election be made under subsection (e)(4)(B), but no dis- tribution to any taxpayer other than an indi- vidual, estate, or trust may be treated as a lump sum distribution under this paragraph. (3) Definitions For purposes of this subsection- (A) The term "securities" means only shares of stock and bonds or debentures issued by a corporation with interest cou- pons or in registered form. (B) The term "securities of the employer corporation" includes securities of a parent or subsidiary corporation (as defined in sub- sections (e) and f) of section 425) of the employer corporation. (4) Distributions by United States to nonresident aliens The amount includible under paragraph (1) or (2) of this subsection in the gross income of a nonresident alien individual with respect to a distribution made by the United States in respect of services performed by an employee of the United States shall not exceed an amount which bears the same ratio to the amount includible in gross income without regard to this paragraph as- (A) the aggregate basic pay paid by the United States to such employee for such services, reduced by the amount of such basic pay which was not includible in gross income by reason of being from sources without the United States, bears to (B) the aggregate basic pay paid by the United States to such employee for such services. In the case of distributions under the civil service retirement laws, the term "basic pay" shall have the meaning provided in section 8331(3) of title 5, United States Code. (5) Rollover amounts In the case of an employees' trust described in section 401(a) which is exempt from tax under section 501(a), if- (A) the balance of the credit of an em- ployee is paid to him- (1) within one taxable year of the em- ployee on account of a termination of the plan of which the trust is a part or, in the case of a profit-sharing or stock bonus plan, a complete discontinuance of contri- butions under such plan, or (ii) in one or more distributions which constitute a lump-sum distribution within the meaning of subsection (e)(4)(A) (de- termined without reference to subsection (e)(4)(13)), (B)(i) the employee transfers all the prop- erty he receives in such distribution to an individual retirement account described in section 408(a), an individual retirement an- nuity described in section 408(b) (other than an endowment contract), or a retire- ment bond described in section 409, on or before the 60th day after the day on which he received such property, to the extent the fair market value of such property exceeds the amount referred to in subsection (e)(4)(D)(i), or (ii) the employee transfers all the proper. ty he receives in such distribution to an em- ployee's trust described in section 401(a) which is exempt from tax under section 501(a), or to an annuity plan described in section 403(a) on or before the 60th day after the day on which he received such property, to the extent the fair market value of such property exceeds the amount referred to in subsection (e)(4)(D)(i), and (C) the amount so transferred consists of the property (other than money) distribut- ed, to the extent that the fair market value of such property does not exceed the amount required to be transferred pursuant to subparagraph (B), then such distributions are not includible in gross income for the year in which paid. For purposes of this title, a transfer described in subparagraph (B)(1) shall be treated as a rol- lover contribution as described in section 408(d)(3). Subparagraph (B)(ii) does not apply in the case of a transfer to an employ- ees' trust, or annuity plan if any part of a payment described in subparagraph (A) is at- tributable to a trust forming part of a plan under which the employee was an employee within the meaning of section 401(c)(1) at the time contributions were made on his behalf under the plan. (6) Special rollover rules For purposes of paragraph (5)(A)(i)- (A) Time of termination A complete discontinuance of contribu- tions under a profit-sharing or stock bonus plan shall be deemed to occur on the day the plan administrator notifies the Secre- tary (in accordance with regulations pre- scribed by the Secretary) that all contribu- tions to the plan have been completely dis- continued. For purposes of section 411(d)(3), the plan shall be considered to be terminated no later than the day such notice is filed with the Secretary. Page 297