- 6 - husband’s estate); Succession of McVay v. McVay, 476 So. 2d 1070, 1073-1074 (La. Ct. App. 1985) (IRA to be accounted for in division of community property at divorce). Our analysis of this issue begins with section 408(d)(1). Pursuant to that section, “any amount paid or distributed out of an individual retirement plan shall be included in gross income by the payee or distributee, as the case may be, in the manner provided under section 72.” Neither the Code nor applicable regulations define the terms “distributee” or “payee” as used in section 408(d)(1). In construing a parallel provision governing the taxation of distributions from pension plans under section 402,4 we have held that a distributee is generally “the participant or beneficiary who, under the plan, is entitled to receive the distribution”. Darby v. Commissioner, 97 T.C. 51, 58 (1991); see also Estate of Machat v. Commissioner, T.C. Memo. 1998-154. Under this definition, petitioner would be the distributee and the payee because he was the IRA participant and received the distributions according to the terms of his IRA’s. Similarly, petitioner’s former spouse would not be a distributee because she was not the IRA participant and did not receive the funds as a designated beneficiary. Thus, unless the community 4Sec. 402(b)(2) provides that “The amount actually distributed or made available to any distributee by * * * [an employee’s trust] shall be taxable to the distributee, in the taxable year in which so distributed or made available, under section 72”.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011