close of the taxable year). (c) Excess contributions For purposes of this section, in the case of contributions to all small business start-up savings accounts maintained for the benefit of a person, the term excess contributions means the sum of— (1) the excess (if any) of— (A) the amount contributed to such accounts for the taxable year, over (B) the amount allowable as a contribution under section 7530(d)(2)(A) for such taxable year, and (2) the amount determined under this subsection for the preceding taxable year, reduced by the sum of— (A) the distributions out of the accounts for the taxable year, and (B) the excess (if any) of— (i) the maximum amount allowable as a contribution under section 7530(d)(2)(A) for such taxable year, over (ii) the amount contributed to such accounts for such taxable year. 5000E. Tax on nonqualified distributions from small business start-up savings accounts (a) In general If for any taxable year an amount is paid or distributed out of a taxpayer’s small business start-up savings account, there is imposed for such taxable year a tax in an amount equal to 10 percent of the portion of such amount which is includible in the gross income of the taxpayer. (b) Exception for disability or death Subsection (a) shall not apply if the payment or distribution is made after the account beneficiary becomes disabled within the meaning of section 72(m)(7) (but only if such beneficiary’s account was created before becoming so disabled) or dies. 5000F. Cross reference For prohibited transactions, see section 4975. . (c) Prohibited transactions (1) In general Paragraph (1) of section 4975(e) of such Code is amended by striking or at the end of subparagraph (F), by striking the period at the end of subparagraph and inserting , or , and by adding at the end the following new subparagraph: (H) a small business start-up savings account (within the meaning of section 7530). . (2) Special rule for ceasing to be a small business start-up savings account Section 4975(c) of such Code (relating to tax on