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The calculations reflected on lines 4, 5, and 9 effectively
reduce the amount of the gross distribution received by
petitioner during 1999 by a ratable portion of the taxed
contributions he made to his retirement plan, as allowed by
section 72(b).
Petitioner argues in his petition that the “IRS alleges the
gross distribution retirement pension amount (Form 1099-R, Box 1)
is the Federal taxable amount of my pension for computing my
Federal income tax on Form 1040, Line 16a.” We note that the
amount of the gross distribution which appears in box 1 of Form
1099-R and which should be on line 16a of Form 1040 is not the
amount included in petitioner’s gross income. This amount, while
meant to be listed on the Form 1040, does not directly figure
into the computation of gross income. The amount included in
gross income is the amount which has been reduced to reflect the
taxed contribution portion, and which appears in box 2a on Form
1099-R and which should be on line 16b of Form 1040.
Because respondent used the proper investment in the
contract in his calculation of the portion of the annuity
payments includable in petitioner’s gross income, we sustain
respondent’s determination in the notice of deficiency.
Reviewed and adopted as the report of the Small Tax Case
Division.
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Last modified: May 25, 2011