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OPINION
RUWE, Judge: Respondent determined a deficiency of $580 in
petitioner’s 1996 Federal income tax. The issues for decision
are: (1) Whether petitioner may adjust the basis in his
retirement annuity by an inflation factor, to take account of
inflation between the date of his contributions to the retirement
plan and the annuity starting date, thereby increasing his basis
from the amount of $36,734 to an adjusted basis of $57,972, for
purposes of calculating the amount of his pension annuity subject
to Federal income tax; and (2) whether petitioner may further
adjust the basis in his retirement annuity to take into account
expected inflation over his actuarial life for purposes of
calculating the amount of his pension annuity subject to Federal
income tax.
Background
The parties submitted this case fully stipulated pursuant to
Rule 122.1 The stipulation of facts and the attached exhibits
are incorporated herein by this reference. Petitioner resided in
Friday Harbor, Washington, at the time he filed his amended
petition.
Petitioner was employed by Montana State University from
1Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
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Last modified: May 25, 2011