- 9 - income on the contract and not includable in income to the extent allocable to the investment in the contract.6 Section 408(d)(4) sets forth an exception to the foregoing general rule. As applicable to the present case, section 408(d)(4) provides that if an excess contribution is distributed to and received by the contributor on or before the due date of the return (including extensions) for the year of the excess contribution, then such excess contribution is not includable in the contributor's gross income.7 Petitioner made total excess contributions to her three IRA's in the amount of $309,534.81 (i.e., $311,534.81 less 6 Under sec. 72(c)(4), "annuity starting date" is defined as the first day of the first period for which an amount is received as an annuity under the contract. Petitioner received a single payment in the amount of $97,227.74 from her First American IRA's prior to drawing annuity payments from her First American IRA's. Thus, the distribution was received by petitioner before the annuity starting date and, accordingly, sec. 72(e)(2)(B) applies. 7 Sec. 408(d)(4) provides: (4) Contributions Returned Before Due Date of Return.-- * * * [section 72] does not apply to the distribution of any contribution paid during a taxable year to an individual retirement account * * * if-- (A) such distribution is received on or before the day prescribed by law (including extensions of time) for filing such individual's return for such taxable year, (B) no deduction is allowed under section 219 with respect to such contribution, and (C) such distribution is accompanied by the amount of net income attributable to such contribution.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011