William D. and Joyce M. Reimels - Page 17

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          Section 104(b)(1) provides that the exclusion under section                 
          104(a)(4) is restricted to the classes of individuals described             
          in section 104(b)(2), as follows:                                           
                    (2) Individuals to whom subsection (a)(4)                         
               continues to apply.--An individual is described in this                
               paragraph if--                                                         
                         (A) on or before September 24, 1975, he was                  
                    entitled to receive any amount described in                       
                    subsection (a)(4),                                                
                         (B) on September 24, 1975, he was a member of                
                    any organization (or reserve component thereof)                   
                    referred to in subsection (a)(4) or under a                       
                    binding written commitment to become such a                       
                    member,                                                           
                         (C) he receives an amount described in                       
                    subsection (a)(4) by reason of a combat-related                   
                    injury, or                                                        
                         (D) on application therefor, he would be                     
                    entitled to receive disability compensation from                  
                    the Veterans’ Administration.                                     
          For purposes of section 104(b)(2)(C), the term “combat-related              
          injury” means personal injury or sickness which is:  (1) Incurred           
          as a direct result of armed conflict, engagement in extra                   
          hazardous service, or under conditions simulating war; or (2)               
          caused by an instrumentality of war.  Sec. 104(b)(3).14                     

               13(...continued)                                                       
               employment while receiving tax-free “disability”                       
               payments from the military. * * * [H. Rept. 94-658, at                 
               152 (1975), 1976-3 C.B. (Vol. 2) 695, 844.]                            
               14 Sec. 104(b)(3) also provides that “In the case of an                
          individual who is not described in subparagraph (A) or (B) of               
          paragraph (2), except as provided in paragraph (4), the only                
                                                             (continued...)           





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