Lucky Stores, Inc. and Subsidiaries - Page 19

                                       - 19 -                                         

               anticipated contributions exceed such a limitation, the                
               portion of each such employer's contributions which is not             
               deductible under section 404 shall be determined in                    
               accordance with regulations prescribed by the Secretary.               

               We think petitioner's attempt to use the expanded time of              
          payment provision of section 404(a)(6), as augmented by section             
          413(b)(7), to enlarge its current contribution deduction is                 
               The legislative history explains that the purpose of                   
          amending section 404(a)(6) was simply to place cash basis                   
          taxpayers on the same footing as accrual basis taxpayers insofar            
          as contributions actually paid into the trust after the close of            
          the taxable year are concerned.  Before the amendment, only                 
          contributions by accrual basis taxpayers made by the time for               
          filing tax returns could be treated as paid in the year for which           
          a return was due.  This allowed taxpayers sufficient time after             
          the close of the taxable year to determine the amount of their              
          contributions to be made to the plan.  Section 404(a)(6) extends            
          this flexibility to cash basis taxpayers.  H. Rept. 93-807 (1974)           
          1974-3 C.B. (Supp.) 236, 336.                                               
               In addition, the conference report states that the intent of           
          permitting grace period contributions is so that they may relate            
          back to the plan year "for purposes of the minimum funding                  

Page:  Previous  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  Next

Last modified: May 25, 2011