treatment of certain royalties for retirement test purposes

treatment of certain royalties for retirement test purposes Sec. 325. (a) (1) Subparagraph (B) of section 203 (f)(5) of the Social Security Act is amended to read as follows: “(B) For purposes of this section— “(i) an individual’s net earnings from self-employment for any taxable year shall be determined as provided in section 211, except that paragraphs (1), (4), and (5) of section 211(c) shall not apply and the gross income shall be computed by excluding the amounts provided by subparagraph (D), and “(ii) an individual’s net loss from self-employment for any taxable year is the excess of the deductions (plus his distributive share of loss described in section 702(a)(9) of the Internal Revenue Code of 1954) taken into account under clause (i) over the gross income (plus his distributive share of income so described) taken into account under clause (i).” (2) Such section 203(f)(5) is further amended by adding at the end thereof the following new subparagraph: “(D) In the case of an individual— “(i) who has attained the age of 65 on or before the last day of the taxable year, and “(ii) who shows to the satisfaction of the Secretary that lie is receiving royalties attributable to a copyright or patent obtained before the taxable year in which he attained the age of 65 and that the property to which the copyright or patent relates was created by his own personal efforts, there shall be excluded from gross income any such royalties.” (b) The amendments made by subsection (a) shall apply with respect to the computation of net earnings from self-employment and the net loss from self-employment for taxable years beginning after 1964.