Michael G. Bunney - Page 6




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          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”.                                                                





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