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amount in excess of the account limit for the taxable
year determined under the deduction limits provided by
the Act (sec. 419A(c) and (f)). The limit on the set-
aside is intended to apply to more-than-10-employer
VEBAs which are exempt from the deduction limitations.
* * *
In general, the rules applicable in computing the
account limit under the deduction rules [section 419],
such as the special reserve limits for collectively
bargained plans, also are applicable in determining the
set-aside allowed for purposes of the unrelated busi-
ness income tax. However, for purposes of determining
the limit on the set aside, the account limit is not to
include any amount with respect to reserves to provide
post-retirement medical benefits. The limit on the
amount set aside as exempt function income does not
include a reserve for post-retirement medical benefits
because, in view of the advance deductions provided to
employers for these benefits, it was determined that
the allowance of such a tax-exempt reserve would pro-
vide an unnecessary tax incentive with respect to these
benefits. [Footnote ref. omitted; emphasis added.]
Staff of Joint Comm. on Taxation, General Explanation of the
Revenue Provisions of the Deficit Reduction Act of 1984, at 791
(J. Comm. Print 1984).
The General Explanation plainly provides that, in determin-
ing the limitation prescribed by section 512(a)(3)(E)(i), a
reserve for post-retirement medical benefits is not to be taken
into account in determining the account limit. The General
Explanation does not indicate that, in making that determination,
such a reserve is not to be taken into account in calculating the
amount of assets set aside at the close of a taxable year.19
19If we were to accept the Trustee’s alternative position
that for each year at issue not only the account limit, as
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