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defined in section 402(c)(8)(B)) within 60 days of receipt of the
distributed property. Sec. 403(b)(8). Under section
402(c)(4)(C), an eligible rollover distribution specifically
excludes any hardship distribution. Moreover, an early
withdrawal from a section 403(b) annuity contract that does not
meet the aforementioned distribution requirements is subject to
an early withdrawal penalty of 10 percent of the portion of such
amount that is includable in gross income.8 Sec. 72(t)(1).
As relevant to this case, any amount that is received
under an annuity contract on its complete surrender, which is not
received as an annuity and is not subject to any other income tax
law provision, shall be included in gross income to the extent it
exceeds the investment in the contract. Sec. 72(e)(1)(A),
(5)(A), (E)(ii). The investment in the contract is defined
generally as the aggregate amount of premiums or other
consideration paid for the contract less amounts previously
received under the contract, to the extent such latter amounts
were excludable from gross income. Sec. 72(e)(6).
Petitioner contends that the distributions at issue are
not includable in gross income because he rolled over the
8 An annuity contract under sec. 403(b) is a “qualified
retirement plan” for purposes of sec. 72(t)(1). See sec.
4974(c)(3).
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