- 14 - We therefore find that under section 72, as modified by section 408(d)(1) and (2), part of petitioner's retirement account distributions represents a nontaxable return to him of his investment in the contract and part represents accrued income, which petitioner agrees is taxable to him. Return of Contributions Before we apply section 72 as modified by section 408(d)(1) and (2), however, we must consider the effect of section 408(d)(4) and (5). Under these provisions, nondeductible amounts contributed to an IRA for a taxable year, and later withdrawn, are not treated as taxable distributions.6 Contributions withdrawn by the individual by April 15 of the year following the taxable year, for which no deduction is allowed with respect to the contribution, are not taxable upon distribution. Sec. 408(d)(4); Childs v. Commissioner, T.C. Memo. 1996-267. Petitioner was employed by the Tribe in Indian fishing- rights-related activity. Payments to petitioner for such Indian fishing-rights-related services were not includable in his gross income. Sec. 7873. The contributions made on his behalf to Guardian by the Tribe were made due to his Indian fishing-rights- related services and are considered as "compensation" under 6A contribution distributed before the due date of the return must be accompanied by the amount of net income attributable to such contribution which net income is includable in gross income. Sec. 408(d)(4).Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
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