A bill to amend the Internal Revenue Code of 1954 to waive in certain cases the residency requirements for deductions or exclusions of individuals living abroad, to allow the tax-free rollover of certain distributions from money purchase pension plans, and for other purposes.
PL 96-608 (H.R.5973), enacted 12/28/1980

94 STAT. 3550 
PUBLIC LAW 96-608—DEC. 28, 1980 
Public Law 96-608 
96th Congress 
Dec. 28, 1980 
[H.R. 5973] 
Internal 
Revenue Code 
of 1954, 
amendment. 
26 u s e 913. 
An Act 
26 u s e 913 note. 
26 u s e 911. 
Supra. 
To amend the Internal Revenue Code of 1954 to waive in certain cases the residency 
requirements for deductions or exclusions of individuals living abroad, to allow 
the tax-free rollover of certain distributions from money purchase pension plans, 
and for other purposes. 
Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, 
SECTION 1. RESIDENCY REQUIREMENTS FOR DEDUCTIONS OR EXCLU-
SIONS OF INDIVIDUALS LIVING ABROAD. 
(a) GENERAL RULE.—Subsection (j) of section 913 of the Internal 
Revenue Code of 1954 (relating to deduction for certain expenses of 
living abroad) is amended by adding at the end thereof the following 
new paragraph: 
"(4) WAIVER OF PERIOD OF STAY IN FOREIGN COUNTRY.—For 
purposes of paragraphs (1) and (2) of subsection (a), an individual 
who— 
"(A) for any period is a bona fide resident of or is present in 
a foreign country, 
"(B) leaves such foreign country after August 31, 1978— 
"(i) during any period during which the Secretary 
determines, after consultation with the Secretary of 
State or his delegate, that individuals were required to 
leave such foreign country because of war, civil unrest, 
or similar adverse conditions in such foreign country 
which precluded the normal conduct of business by such 
individuals, and 
"(ii) before meeting the requirements of such para-
graphs (1) and (2), and 
"(C) establishes to the satisfaction of the Secretary that he 
could reasonably have been expected to have met such 
requirements but for the conditions referred to in clause (i) 
of subparagraph (B), 
shall be treated as having met such requirements with respect to 
the period described in subparagraph (A) during which he was a 
bona fide resident or was present in the foreign country." 
(b) EFFECTIVE DATES.— 
(1) IN GENERAL.—The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31,1977. 
(2) APPLICATION FOR PURPOSES OF SECTION 91I.—In the case of 
an individual who leaves the foreign country after August 31, 
1978, rules similar to the rules of section 913(j)(4) of the Internal 
Revenue Code of 1954 (as added by subsection (a)) shall apply for 
purposes of applying section 911 of such Code for taxable years 
beginning in 1977 or 1978. 
PUBLIC LAW 96-608—DEC. 28, 1980 
94 STAT. 3551 
SEC. 2. ROLLOVER TREATMENT FOR CERTAIN DISTRIBUTIONS FROM 
MONEY PURCHASE PENSION PLANS. 
(a) GENERAL RULE.—Paragraph (6) of section 402(a) of the Internal 
Revenue Code of 1954 (relating to special rollover rules) is amended 26 USC 402. 
by adding at the end thereof the following new subparagraph: 
"(E) SPECIAL RULE WHERE EMPLOYER MAINTAINS MONEY 
PURCHASE PENSION PLAN AND OTHER PENSION PLAN.— 
"(i) IN GENERAL.—In the case of any distribution from 
a money purchase pension plan which is maintained by 
an employer, for purposes of paragraph (5)(D)(iXII), sub-
section (e)(4XC) shall be applied by not taking into 
account any pension plan maintained by such employer 
which is not a money purchase pension plan. The 
preceding sentence shall not apply to any distribution 
which is a qualifying rollover distribution without 
regard to this subparagraph. 
(ii) TREATMENT OF SUBSEQUENT DISTRIBUTIONS.—If— 
"(I) any distribution of the balance to the credit of 
an employee from a money purchase pension plan 
maintained by an employer is treated as a qualify-
ing rollover distribution by reason of clause (i), and 
(II) any portion of such distribution is trans-
ferred in a transfer to which paragraph (5)(A) 
applies, 
then paragraph (2) of subsection (a), and paragraphs (1) 
and (3) of subsection (e), shall not apply to any distribu-
tion (after the taxable year in which the distribution 
described in subparagraph (A) of paragraph (5) is made) 
of the balance to the credit of such employee from any 
other pension plan maintained by such employer." 
O
t
)
) EFFECTIVE DATES.— 
26 use 402 note. 
(1) IN GENERAL.—The amendment made by subsection (a) shall 
apply to payments made in taxable years beginning after Decem-
ber 31,1978. 
(2) TRANSITIONAL RULE.—In the case of any payment made 
before January 1,1982, in a taxable year beginning after Decem-
ber 31,1978, which is treated as a qualifying rollover distribution 
(as defined in section 402(a)(5)(D)(i) of the Internal Revenue Code 
of 1954) by reason of the amendment made by subsection (a), the 
applicable period specified in section 402(a)(5)(C) of such Code 
shall not expire before the close of December 31,1981. 
SEC. 3
. 
TREATMENT OF CERTAIN REPAYMENTS OF SUPPLEMENTAL 
UNEMPLOYMENT 
COMPENSATION 
BENEFITS. 
(a) GENERAL RULE.—Section 62 of the Internal Revenue Code of 
1954 (defining adjusted gross income) is amended by inserting after 
26 USC 62. 
paragraph (15) the following new paragraph: 
"(16) CERTAIN REQUIRED REPAYMENTS OF SUPPLEMENTAL UNEM-
PLOYMENT COMPENSATION BENEFITS.—The deduction allowed by 
section 165 for the repayment to a trust described in paragraph 26 USC 165. 
(9) or (17) of section 501(c) of supplemental unemployment 26 USC 501. 
compensation benefits received from such trust if such repay-
ment is required because of the receipt of trade readjustment 
allowances under section 231 or 232 of the Trade Act of 1974 (19 
U.S.C. 2291 and 2292)." 
O
b
) EFFECTIVE DATE.—The amendment made by subsection (a) shall 26 usc 62 note. 
apply to repayments made in taxable years beginning after the date 
of the enactment of this Act. 
94 STAT. 3552 
PUBLIC LAW 96-608—DEC. 28, 1980 
SEC. 4. TAX TREATMENT OF EXPENSES IN ATTENDING FOREIGN CONVEN-
TIONS. 
26 use 274. 
(a) i^ GENERAL.—Subsection (h) of section 274 of the Internal 
Revenue Code of 1954 (relating to attendance at foreign conventions, 
etc.) is amended to read as follows: 
"(h) ATTENDANCE AT CONVENTIONS, ETC.— 
"(1) IN GENERAL.—In the case of any individual who attends a 
convention, seminar, or similar meeting which is held outside the 
North American area, no deduction shall be allowed under 
26 use 162, 212. 
section 162 or 212 for expenses allocable to such meeting unless 
the taxpayer establishes that the meeting is directly related to 
the active conduct of his trade or business or to an activity 
described in section 212 and that, after taking into account in the 
manner provided by regulations prescribed by the Secretary— 
"(A) the purpose of such meeting and the activities taking 
place at such meeting, 
"(B) the purposes and activities of the sponsoring organiza-
tions or groups, 
"(C) the residences of the active members of the sponsoring 
organization and the places at which other meetings of the 
sponsoring organization or groups have been held or will be 
held, and 
"(D) such other relevant factors as the taxpayer may 
present, 
it is as reasonable for the meeting to be held outside the North 
American area as within the North American area. 
"(2) CONVENTIONS ON CRUISE SHIPS.—In the case of any individ-
ual who attends a convention, seminar, or other meeting which is 
held on any cruise ship, no deduction shall be allowed under 
section 162 or 212 for expenses allocable to such meeting. 
"(3) DEFINITIONS.—For purposes of this subsection— 
"(A) NORTH AMERICAN AREA.—The term 'North American 
area' means the United States, its possessions, and the Trust 
Territory of the Pacific Islands, and Canada and Mexico. 
"(B) CRUISE SHIP.—The term 'cruise ship' means any vessel 
sailing within or without the territorial waters of the United 
States. 
"(4) 
SUBSECTION TO APPLY TO EMPLOYER AS WELL AS TO 
TRAVELER.— 
"(A) Except as provided in subparagraph (B), this subsec-
tion shall apply to deductions otherwise allowable under 
section 162 or 212 to any person, whether or not such person 
is the individual attending the convention, seminar, or 
similar meeting. 
"(B) This subsection shall not deny a deduction to any 
person other than the individual attending the convention, 
seminar, or similar meeting with respect to any amount paid 
by such person to or on behalf of such individual if includible 
in the gross income of such individual. The preceding sen-
tence shall not apply if the amount is required to be included 
in any information return filed by such person under part III 
26 use 6001. 
of subchapter A of chapter 61 and is not so included.". 
26 use 274 note. 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) of 
this section shall apply to conventions, seminars, and meetings 
beginning after December 31, 1980, except that in the case of any 
convention, seminar, or meeting beginning after such date which was 
scheduled on or before such date, a person, in such manner as the 
Secretary of the Treasury or his delegate may prescribe, may elect to 
PUBLIC LAW 96-608—DEC. 28, 1980 
94 STAT. 3553 
have the provisions of section 274(h) of the Internal Revenue Code of 
1954 be appUed to such convention, seminar or meeting without ^«^e, p. 3552. 
regard to such amendment. 
SEC. 5. TAXES ON SELF-DEALING IN THE CASE OF CERTAIN LEASES. 
Section 4941(d)(2) of the Internal Revenue Code of 1954 (relating to 26 USC 4941. 
special rules in the case of self-dealing) is amended— 
(1) by striking out "and" at the end of subparagraph (F); 
(2) by striking out the period at the end of subparagraph (G) 
and inserting a semicolon and "and"; and 
(3) by adding at the end thereof the following: 
"(H) the leasing by a disqualified person to a private 
foundation of office space for use by the foundation in a 
building with other tenants who are not disqualified persons 
shall not be treated as an act of self-dealing if— 
"(i) such leasing of office space is pursuant to a 
binding lease which was in effect on October 9, 1969, or 
pursuant to renewals of such a lease; 
"(ii) the execution of such lease was not a prohibited 
transaction (within the meaning of section 503(b) or any 26 USC 503. 
corresponding provision of prior law) at the time of such 
execution; and 
"(iii) the terms of the lease (or any renewal) reflect an 
arm's-length transaction." 
SEC. 
6
. 
TREATMENT 
OF 
CERTAIN 
INDEBTEDNESS 
INCURRED 
BEFORE 
1
9
6
5 
FOR 
PURPOSES 
OF 
SECTION 
514. 
(a) GENERAL RULE.—For purposes of applying section 514 of the 
Internal Revenue Code of 1954 with respect to any sale of real 26 USC 514. 
property during 1976, indebtedness incurred before January 1, 1965, 
by an organization to finance the construction of a building on such 
property shall not be treated as acquisition indebtedness if the parcel 
of real property on which such building was constructed— 
(1) was acquired by such organization before January 1, 1952, 
and 
(2) is contiguous to another parcel of real property which— 
(A) was acquired by such organization before January 1, 
1952, and 
94 STAT. 3554 
PUBLIC LAW 96-608—DEC. 28, 1980 
(B) was used by such organization, on January 1,1952, and 
at all times thereafter before the date of the enactment of 
this Act, in a manner which meets the requirements of 
2
6 use 514. 
section 514(b)(1)(A) of such Code (relating to property used in 
carrying out exempt purpose). 
(b) EFFECTIVE DATE.—The provisions of subsection (a) shall apply 
to sales during calendar year 1976. 
Approved December 28, 1980. 
LEGISLATIVE HISTORY: 
HOUSE REPORT No. 96-689 (Comm. on Ways and Means). 
SENATE REPORT No. 96-1031 (Comm. on Finance). 
CONGRESSIONAL RECORD: 
Vol. 125 (1979): Dec. 17, considered and passed House. 
Vol. 126 (1980): Dec. 13, considered and passed Senate, amended; House agreed 
to Senate amendments.