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1999 Federal income tax. The issues are whether petitioner must
include in gross income (1) a distribution received from an
annuity and (2) Social Security benefits. Petitioner resided in
Atlanta, Georgia, at the time the petition was filed.
Background
Petitioner retired from the U.S. Post Office on April 1,
1962, as totally disabled. Since 1962, petitioner has received
payments under a disability retirement annuity administered by
the Office of Personnel Management (OPM). For the taxable year
1999, OPM issued a Form 1099-R, Distributions From Pensions,
Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance
Contracts, etc., to petitioner indicating a distribution of
$13,740. The Social Security Administration also issued a Form
1099-SSA to petitioner indicating Social Security benefits of
$8,526. In preparing his 1999 Federal income tax return,
petitioner failed to include the annuity payments and the Social
Security benefits in his gross income. Upon examination,
respondent concluded that the annuity payments and Social
Security benefits are includable in petitioner’s gross income.
Discussion
Annuity Payments
We have already explored the statutory bases for the tax
treatment of annuity payments and Social Security benefits with
respect to petitioner in Laws v. Commissioner, T.C. Memo. 2003-
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