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TITLE 26-INTERNAL REVENUE CODE years in order of time to the extent of the difference between the amount paid and de- ductible in each such succeeding year and the maximum amount deductible for such year under the foregoing limitations. (2) Employees' annuit'es In the taxable year when paid, in an amount determined in accordance with para- graph (1), if the contributions are paid toward the purchase of retirement annuities, or retirement annuities and medical benefits as described in section 401(h), and such pur- chase is part of a plan which meets the re- quirements of section 401(a)(3), (4), (5), (6), (7), (8), (11), (12), (13), (14), (15), (16), (17), (18), (19), and (20) and, if applicable, the re- quirements of section 401(a)(9), (10), (17), and (18) and of section 401(d) (other than para- graph (1)), and if refunds of premiums, if any, are applied within the current taxable year or next succeeding taxable year toward the pur- chase of such retirement annuities, or such retirement annuities and medical benefits. (3) Stock bonus and profit-sharing trusts (A) Limits on deductible contributions In the taxable year when paid, if the con- tributions are paid into a stock bonus or profit-sharing trust, and if such taxable year ends within or with a taxable year of the trust with respect to which the trust is exempt under section 501(a), in an amount not in excess of 15 percent of the compensa- tion otherwise paid or accrued during the taxable year to all employees under the stock bonus or profit-sharing plan. If in any taxable year there is paid into the trust, or a similar trust then in effect, amounts less than the amounts deductible under the pre- ceding sentence, the excess, or if no amount is paid, the amounts deductible, shall be carried forward and be deductible when paid in the succeeding taxable years in order of time, but the amount so deductible under this sentence in any such succeeding taxable year shall not exceed 15 percent of the compensation otherwise paid or accrued during such succeeding taxable year to the beneficiaries under the plan, but the amount so deductible under this sentence in any one succeeding taxable year together with the amount so deductible under the first sentence of this subparagraph shall not exceed 25 percent of the compensation otherwise paid or accrued during such tax- able year to the beneficiaries under the plan. In addition, any amount paid into the trust in any taxable year in excess of the amount allowable with respect to such year under the preceding provisions of this sub- paragraph shall be deductible in the suc- ceeding taxable years in order of time, but the amount so deductible under this sen- tence in any one such succeeding taxable year together with the amount allowable under the first sentence of this subpara- graph shall not exceed 15 percent of the compensation otherwise paid or accrued during such taxable year to the beneficia- ries under the plan. The term "stock bonus or profit-sharing trust", as used in this sub- paragraph, shall not include any trust de- signed to provide benefits upon retirement and covering a period of years, if under the plan the amounts to be contributed by the employer can be determined actuarially as provided in paragraph (1). If the contribu- tions are made to 2 or more stock bonus or profit-sharing trusts, such trusts shall be considered a single trust for purposes of ap- plying the limitations in this subparagraph. (B) Profit-sharing plan of affiliated group In the case of a profit-sharing plan, or a stock bonus plan in which contributions are determined with reference to profits, of a group of corporations which is an affiliated group within the meaning of section 1504, if any member of such affiliated group is pre- vented from making a contribution which it would otherwise have made under the plan, by reason of having no current or accumu- lated earnings or profits or because such earnings or profits are less than the contri- butions which it would otherwise have made, then so much of the contribution which such member was so prevented from making may be made, for the benefit of the employees of such member, by the other members of the group, to the extent of cur- rent or accumulated earnings or profits, except that such contribution by each such other member shall be limited, where the group does not file a consolidated return, to that proportion of its total currcat and ac- cumulated earnigns or profits remaining after adjustment for its contribution de- ductible without regard to this subpara- graph which the total prevented contribu- tion bears to the total current and accumu- lated earnings or profits of all the members of the group remaining after adjustment for all contributions deductible without regard to this subparagraph. Contributions made 'under the preceding sentence shall be deductible u,der subparagraph (A) of this paragraph by the employer making such contribution, and, for the purpose of deter- mining amounts which may be carried for- ward and deducted under the second sen- tence of subparagraph (A) of this para- graph in succeeding taxable years, shall be deemed to have been made by the employer on behalf of whose employees such contri- butions were made. (4) Trusts created or organized outside the United States If a stock bonus, pension, or profit-sharing trust would qualify for exemption under sec- tion 501(a) except for the fact that it is a trust created or organized outside the United States, contributions to such a trust by an employer which is a resident, or corporation, or other entity of the United States, shall be deductible under the preceding paragraphs. (5) Other plans If the plan is not one included in paragraph (1), (2), or (3), in the taxable year in which an amount attributable to the contribution is in- cludible in the gross income of employees par- ticipating in the plan, but, in the case of a plan in which more than one employee par- § 404 Page 308