An Act to provide for the treatment of income from discharge of indebtedness ova railroad corporation in a receivership proceeding or in a proceeding under section 77 of the Bankruptcy Act commenced before January 1, 1960, and for other purposes
PL 86-496 (H.R.11405), enacted 06/08/1960

164 
PUBLIC LAW 8 6-496-JUNE 8, 1960 
[74 ST A T . 
June 8, I960 
[H. R. 11405] 
Public Law 86-496 
AN ACT 
To provide for the treatment of income from discharge of indebtedness of a 
railroad corporation in a receivership proceeding or in a proceeding under 
section 77 of the Bankruptcy Act commenced before January 1, 1960, and 
for other purposes. 
Taxes. 
R a i l ro ad c 
porations. 
68 A Stat. 32. 
26 u s e 108. 
47 Stat. 1481. 
Applicability. 
Deductibility 
vacation pay. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress asserribled^ That (a) section 
108(b) of the Internal Eevenue Code of 1954 (relating to income of a 
railroad corporation from discharge of indebtedness) is hereby 
amended to read as follows: 
"(b) 
RAILROAD CORPORATIONS.—No amount shall be included in 
gross income by reason of the discharge, cancellation, or modification, 
in whole or in part, within the taxable year, of any indebtedness of 
a railroad corporation, as defined in section 77 (m) of the Bankruptcy 
Act (11 U.S.C. 205 (m)), if such discharge, cancellation, or modifica-
tion is effected pursuant to an order of a court— 
"(A) in a receivership proceeding, or 
"(B) in a proceeding under section 77 of the Bankruptcy Act, 
commenced before January 1, 1960. In such cases, the amount of any 
income of the taxpayer attributable to any unamortized premium 
(computed as of the first day of the taxable year in which such dis-
charge occurred) with respect to such indebtedness shall not be in-
cluded in gross incomej and the amount of the deduction attributable 
to any unamortized discount (computed as of the first day of the 
taxable year in which such discharge occurred) with respect to such 
indebtedness shall not be allowed as a deduction. Subsection (a) of 
this section shall not apply with respect to any discharge of indebted-
ness to which this subsection applies." 
(b) The amendment made by subsection (a) shall apply to taxable 
years ending after December 31, 1959, but only with respect to dis-
charges occurring after such date. 
SEC. 2. Section 97 of the Technical Amendments Act of 1958 (26 
U.S.C, sec. 162 note; 72 Stat. 1672), relating to deductibility of ac-
crued vacation pay, is amended by striking out "January 1, 1961," 
and inserting in lieu thereof "January 1, 1963,". 
Approved June 8, 1960. 
June 8, 1960 
[H. R. 10703] 
Public Law 86-497 
AN ACT 
To grant a waiver of national service life insurance premiums to certain veterans 
who became totally disabled in line of duty between the date of application 
and the effective date of their insurance. 
Veterans. 
D i s a b i l i t y in-
surance waiver. 
72 Stat. 1150. 
54 Stat. 1011. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of Atnerica in Congress assembled^ That section 712 of 
title 38, United States Code, is amended by adding the following new 
subsection at the end thereof: 
"(d) In any case in which an insured has been denied or would 
have been denied premium waiver under section 602 (n) of the National 
Service Life Insurance Act of 1940 or this section solely because he 
became totally disabled between the date of valid application for 
insurance and the subsequent effective date thereof, and in which it is 
shown that (1) the total disability was incurred in line of duty 
between October 8, 1940, and July 31, 1946, inclusive, or June 27, 
1950, and April 30, 1951, inclusive, and (2) the insured remained 
continuously so totally disabled to the date of death or the date of 
74 S T A T . ] 
PUBLIC LAW 8 6 . 4 9 9 - J U N E 8, 1960 
165 
enactment of this subsection, whichever is earlier, the Administrator 
may grant waiver of premiums from the beginning of and during the 
continuous total disability of such insured. 
Application for waiver 
of premiums under this subsection must be filed by the insured or, 
in the event of his death, by the beneficiary within two years after the 
date of enactment of this subsection, except that if the insured or 
the beneficiary be insane or a minor within the two-year period, 
application for such waiver may be filed within two years after 
removal of such legal disability, or if an insane insured shall die 
before the removal of the disability, application may be filed by the 
beneficiary within two years after the insured's death. 
No insurance 
shall be placed in force under this subsection in any case in which 
there was an award of benefits under the Servicemen's Indemnity Act 
of 1951 or of gratuitous insurance under section 722(b) of this title, g^^* jSJ|*- 33; 72 
The amount of insurance placed in force hereunder together with any 
other United States Government life insurance or national service 
life insurance in force at the time of death, or at the time of the 
insured's application for waiver hereunder, may not exceed $10,000 
and shall be reduced by the amount of any gratuitous insurance 
awarded under the National Service Life Insurance Act of 1940. 
^^ ^*^*' ^"o** 
Waiver of premiums under this subsection shall render the insurance 
nonparticipating during the period such premium waiver is in effect. 
The cost of waiver of premium and death benefits paid as a result 
of this subsection shall be borne by the United States." 
Approved June 8, 1960. 
Public Law 86-498 
AN ACT 
June 8, 1
1
9
6
0 
To extend for two years the i)eriod for which payments in lieu of taxes may 
[H. R. 9983] 
he made with respect to certain real property transferred by the Reconstruc-
tion Finance Corporation and its subsidiaries to other Government depart-
ments. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled, That (a) section 
703 of the Federal Property and Administrative Services Act of 1949 
\l ^|^ ^||; 
(69 Stat. 722) is amended by striking out the figures "1961", and in--
serting in lieu thereof the figures "1963". 
(b) Section 704 of such Act (69 Stat. 723) is amended by striking 
out the figures "1960", and inserting in lieu thereof the figures "1962'. 
Approved June 8, 1960. 
40 use 5:24. 
Public Law 86-499 
• ^ •^^'^ 
June 8, 1960 
To amend section 315 of title 38, United States Code, to provide additional com- 
[H. R. 10898] 
pensatioii for seriously disabled veterans having four or more children. 
Be it enacted hy the Senate and House of Representatives 
of the 
United 
States 
of America 
in (-ongress assembled, 
That section erm/"''*"'* ^**' 
815(a)(1) of title 38, United States Code, is amended by inserting 
.^^fj|^°""* "™" 
"(plus $12 for each living child in excess of three)" immediately'be- ''*72"strt?'n2i. 
fore the semicolon at the end of subparagraph (D) and (G). 
SEC. 2. The amendments made by this Act shall take effect on the 
first day of the second calendar month which begins after the date of 
enactment of this Act. 
Approved June 8, 1960.