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(i) In general.–-In the case of any
organization described in paragraph (9) * * *
of section 501(c), a set-aside for any pur-
pose specified in clause (ii) of subparagraph
(B) may be taken into account under subpara-
graph (B) only to the extent that such set-
aside does not result in an amount of assets
set aside for such purpose in excess of the
account limit determined under section 419A
(without regard to subsection (f)(6) thereof)
for the taxable year (not taking into account
any reserve described in section
419A(c)(2)(A) for post-retirement medical
benefits).
The Trust as a VEBA that is funded by, inter alia, employer
contributions is subject to sections 41913 and 419A. Section
419A(a) provides:
SEC. 419A. QUALIFIED ASSET ACCOUNT; LIMITATION ON
ADDITIONS TO ACCOUNT.
(a) General Rule.–-For purposes of this subpart
and section 512, the term “qualified asset account”
means any account consisting of assets set aside to
provide for the payment of--
* * * * * * *
(2) medical benefits * * *
Section 419A(c) imposes an account limit on the Trust’s
qualified asset account, as defined in section 419A(a). Section
13Sec. 419 prescribes rules governing the deductibility of
contributions paid or accrued by an employer to a welfare benefit
fund. The amount of such a deduction allowable under sec. 419 is
determined by reference to, inter alia, any addition to a quali-
fied asset account determined under sec. 419A(b). Sec. 419A(b)
provides that no addition to any qualified asset account may be
taken into account for purposes of sec. 419 to the extent such
addition results in the amount in such account exceeding the
account limit, as defined in sec. 419A(c).
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Last modified: May 25, 2011