- 3 - distributions was $37,477.26, and that the nontaxable portion was $945.24. Petitioner filed an individual Federal income tax return for 1999. On this return, petitioner reported total pension and annuity distributions of $37,477.26, and he reported that the taxable portion of the distributions was $34,599.02. In the statutory notice of deficiency, respondent determined that the information reported on the Form 1099-R was correct. Petitioner does not dispute receiving distributions of $38,422.50 from TSERS during the year in issue. Petitioner argues that respondent’s calculation of the taxable portion of these distributions is in error. Gross income generally includes all income from whatever source derived, including pensions and annuities. Sec. 61(a)(9), (11); sec. 72(a). However, portions of annuity payments may be excludable from income under section 72(b). The excludable portion of a payment generally is that portion which bears the same ratio to such payment as the “investment in the contract” bears to the expected return under the contract, determined at the time the annuity payments begin. Sec. 72(b)(1). While the term “investment in the contract” is defined generally as “the aggregate amount of premiums or other consideration paid for the contract”, sec. 72(c)(1)(A), contributions made by an employer on behalf of an employee-taxpayer which were not includable in thePage: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011