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Transfer Refund because a Transfer Refund is payable only as a
result of transferring from the Retirement System to the Pension
System.
As a result of transferring from the Retirement System to
the Pension System, petitioner became, and presently is, a member
of the Pension System. As a member of the Pension System,
petitioner is entitled to receive a retirement benefit based upon
his salary and his creditable years of service, specifically
including those years of creditable service recognized under the
Retirement System. However, because petitioner received the
Transfer Refund on account of transferring from the Retirement
System to the Pension System, petitioner's monthly annuity is
less than the monthly annuity that he would have received if he
had not transferred to the Pension System but had retired under
the Retirement System.
On their Federal income tax return (Form 1040) for 1990,
petitioners reported "total pensions and annuities" in the amount
of $338,451. Of this amount, petitioners reported $301,387 as
the taxable amount. Petitioners attached Form 5329 (Return for
Additional Taxes Attributable to Qualified Retirement Plans
(Including IRAs), Annuities, and Modified Endowment Contracts) to
their return. In Part II of such form, petitioners reported
liability for the additional tax under section 72(t) in the
amount of $30,139.
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Last modified: May 25, 2011