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Pension System are both exempt from taxation under section
501(a).
As previously indicated, petitioner elected to transfer from
the Retirement System to the Pension System on January 30, 1990.
On the application to transfer, petitioner specifically opted to
receive, in a lump sum, the distribution to which he was entitled
upon transferring from the Retirement System to the Pension
System.
As a result of the election to transfer, petitioner received
a distribution (the Transfer Refund) from the Retirement System
in the amount of $158,680.98.4 Of this amount, $158,446.20 was
paid to petitioner by check dated March 31, 1990, from the
Maryland State Retirement Systems and the balance, or $234.78,
was paid by check dated May 31, 1990.
Petitioner's Transfer Refund of $158,680.98 includes
$21,765.02 in previously taxed contributions and $136,681.18 of
earnings.5 The earnings represent interest and constitute the
taxable portion of that part of the Transfer Refund that was paid
4 The parties stipulated that the Transfer Refund amounted
to $158,680.96. The documentary record clearly reveals, however,
that the correct amount is $158,680.98.
5 So stipulated. The sum of these two amounts equals
$158,446.20, which is the amount of the check dated March 31,
1990, from the Maryland State Retirement Systems. Although the
record is not completely clear regarding the status of the
balance of the Transfer Refund, i.e., the $234.78 amount that was
paid to petitioner by check dated May 31, 1990, it would appear
that this amount represents taxable employer "pickup"
contributions. See sec. 414(h).
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