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E. Whether Petitioner’s 1996 NYSL Payment Is Excluded From
Gross Income as an Annuity Under Section 72(b)(1)
Petitioner contends that he may exclude the 1996 NYSL
payment from income as an annuity under section 72(b)(1).5
We disagree.
Gross income generally includes any amount received as an
annuity. Sec. 72(a). However, amounts attributable to the
taxpayer’s investment in the annuity contract are excludable.
Sec. 72(b)(1). Petitioner paid $1 for the winning lottery
ticket. Thus, petitioner may exclude at most $1. Id. We
conclude that petitioner may not exclude the 1996 NYSL payment
from income under section 72(b)(1).
F. Whether Petitioner Had a $4,237 Net Operating Loss Carryover
for 1996
Petitioner contends that he may carry over to 1996 a $4,237
net operating loss which resulted from investment losses from his
rental property in previous years. We disagree.
Petitioner reported in a statement attached to his 1996
return that he had a $4,237 net operating loss carryover.6 He
5 Sec. 72(b) provides in part:
(1) In general.--Gross income does not include that part of
any amount received as an annuity under an annuity, endowment, or
life insurance contract which bears the same ratio to such amount
as the investment in the contract (as of the annuity starting
date) bears to the expected return under the contract (as of such
date).
6 A tax return is not evidence of the truth of the facts
(continued...)
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