[Code of Federal Regulations]
[Title 26, Volume 5]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.419A-1T]

[Page 873-874]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.419A-1T  Qualified asset account limitation of additions to account. (Temporary)

    Q-1: What does the transition rule under section 419A(f)(7) provide?
    A-1: Section 419A(f)(7) provides that, in the case of a welfare 
benefit fund that was in existence on July 18, 1984, the account limit 
(as determined under section 419A(c)) for each of the first four taxable 
years of the fund that relate to taxable years of the employer ending 
after December 31, 1985 (or, if applicable under paragraph (b) of Q&A-2 
of Sec. 1.419-1T, taxable years of the employer beginning after the 
termination of the last of the collective bargaining agreements pursuant 
to which the plan is maintained) shall be increased by the following 
percentages of the ``existing excess reserve amount'':


                                                                 Percent

First taxable year............................................        80
Second taxable year...........................................        60
Third taxable year............................................        40
Fourth taxable year...........................................        20


    For purposes of this section, the ``existing excess reserve amount'' 
for any taxable year of a fund is the excess of (a) the assets actually 
set aside for purposes described in section 419A(a) at the close of the 
first taxable year of the fund ending after July 18, 1984 (calculated in 
the manner set forth in Q&A-3 of Sec. 1.512(a)-3T, and adjusted under 
paragraph (c) of Q&A-11 of Sec. 1.419-1T), reduced by employer 
contributions to the fund before the close of such first taxable year to 
the extent that such contributions are not deductible for the taxable 
year of the employer with or within which such taxable year of the fund 
ends and for any prior taxable year of the employer, over (b) the 
account limit which would have applied to the taxable year of the

[[Page 874]]

fund for which the excess is being computed (without regard to this 
transition rule). A welfare benefit fund is treated as in existence on 
July 18, 1984, for purposes of this transition rule only if amounts were 
actually set aside in such fund on such date to provide welfare benefits 
enumerated under section 419A.

[T.D. 8073, 51 FR 4329, Feb. 4, 1986, as amended at 51 FR 11303, Apr. 2, 
1986]