Individual Savings and Investment Act of 1979

Individual Savings and Investment Act of 1979 - Amends the Internal Revenue Code to exclude from the gross income of an individual amounts contributed to a rollover account meeting the requirements of this Act. Defines such rollover account as a trust created or organized in the United States for the exclusive benefit of an individual or his beneficiaries. Requires such a trust: (1) to accept only cash or stock or securities of a domestic corporation contributed by such individual only; (2) to be a bank or other person satisfactory to the Secretary of the Treasury; (3) to invest trust funds in stock or securities of a domestic corporation or hold them in interest-bearing bank deposits; (4) to make the interest of the individual nonforfeitable in the balance of such rollover account; (5) to permit the individual to elect, no more often than each taxable year, whether such rollover account shall be discretionary (with investment determined by the trustee) or self-directed (with investment directed by the individual).

Requires the trustee of a rollover fund to establish on its books, without segregation of assets, an ordinary income fund, a capital gain fund, and a capital fund. Specifies the contents of each fund.

Requires inclusion of any amount paid or distributed from the account in the individual's gross income for the taxable year in which such payment or distribution is made. Requires any such payment or distribution from the account to be treated as made: first, from the ordinary income fund; second, from the capital gain fund; and third, from the capital fund. Prohibits treatment of any payment or distribution as being made from a particular fund until the balance of any fund which precedes it in priority has been exhausted.

Sets forth rules for the treatment of losses, security pledges, and transfers of account incident to divorce. Limits the number of rollover accounts which an individual may maintain to one at a time. Requires the trustee of such an account to keep appropriate records and to file annual returns with the Secretary.