Andrew J. Eberly and Ruthanne E. Eberly - Page 7

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          checks each in the amount of $150,000 to Farmer’s New World Life            
          Insurance Company.  Each $150,000 check was issued for an                   
          individual retirement account (IRA) in the name of each of                  
          decedent’s three children.                                                  
               On decedent’s 2000 Form 1040, U.S. Individual Income Tax               
          Return, the personal representative reported the lump-sum                   
          distribution from decedent’s TIAA-CREF accumulated annuity fund             
          as reported on the Form 1099-R.  However, the personal                      
          representative erroneously reported the taxable amount of the               
          distribution to be $149,949.2                                               
               On decedent’s Form 706, United States Estate (and                      
          Generation-Skipping Transfer) Tax Return, the personal                      
          representative included the remaining balance of decedent’s TIAA-           
          CREF accumulated annuity funds in decedent’s gross estate.3  On             
          Form 1041, U.S. Income Tax Return for Estates and Trusts,                   
          decedent’s estate did not report any amount with respect to                 


               2  This amount reflects the taxable amount of the                      
          distribution reported on the Form 1099-R, Distributions From                
          Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs,              
          Insurance Contracts, etc., less the $450,000 received by                    
          decedent’s three children.  The personal representative                     
          erroneously determined that the $450,000 received by decedent’s             
          three children for the three IRAs was a tax-free “roll-over”                
          under sec. 403(b)(8).                                                       
               3  After decedent’s death, TIAA-CREF computed the 25 percent           
          death benefits distribution to the charitable beneficiaries based           
          upon the balance in the annuity fund after the $600,000                     
          distribution to decedent.                                                   






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