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taxable to petitioner as interest income.
Discussion
Respondent's determinations are presumed correct, and
petitioner bears the burden of proving otherwise. Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933).
Annuity Payment
Section 61(a) defines gross income as "all income from
whatever source derived". Annuities are specifically included in
gross income. Sec. 61(a)(9). The burden is on petitioner to
demonstrate that the payment in question falls into a specific
statutory exclusion. Commissioner v. Glenshaw Glass Co., 348
U.S. 426, 429-431 (1955).
In general, section 72 deals with the income tax treatment
of annuities. Section 1.72-1(a), Income Tax Regs., provides that
section 72 prescribes rules regarding the inclusion in gross
income of amounts received under a life insurance, endowment, or
annuity contract except where such amounts are specifically
excluded from gross income under other provisions of chapter 1 of
the Code. These rules provide that, in general, the amounts
subject to the provisions of section 72 are includable in the
gross income of the recipient except to the extent that they are
considered to represent a reduction or return of premiums or
other consideration paid. Sec. 1.72-1(a), Income Tax Regs.
Any amount received, whether in a single sum or otherwise,
in full discharge of the obligation under the annuity contract,
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