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certifying that the policy had been lost or destroyed.
In June 2001, petitioner received checks in full settlement
of the current cash surrender value of each policy as follows:
Date Accumulated Loan PayoffCash Surrender Net
Account Paid Cash Value Value Value1 Penalty Distribution2
7142446 Jun 11 $12,434 3$6,429 $6,005 $2,126 $3,879
7142859 Jun 26 10,590 4 8,896 1,694 858 836
7166534 Jun 11 4,700 -0- 4,700 592 53,286
1 Cash value equals accumulated cash value less loan payoff value.
2 Net distribution equals cash value less surrender penalty.
3 On June 14, 1999, College Life sent petitioner a “loan check” of
$4,711. Petitioner deposited this check into his wife’s account at First
South Credit Union (FSCU). Although petitioner claims that his wife’s account
is an annuity account, there is no evidence in the record to support his
claim. Rather, based on the documents in the record, it appears that the
account is a savings account.
4 On June 7, 1999, College Life sent petitioner a “loan check” of
$3,182. Petitioner deposited this check into his wife’s account at FSCU.
5 This computation includes a reduction for Federal income tax withheld
of $822.
At the time of the distributions, petitioner was under 59-1/2
years of age, he was not disabled, and he had been employed with
Memphis City Schools continually since 1980.
Americo issued to petitioner three Forms 1099-R,
Distributions From Pensions, Annuities, Retirement or Profit-
Sharing Plans, IRAs, Insurance Contracts, etc., for 2001
reporting the following amounts as taxable distributions:
Account Distribution1 Withholding Code
7142446 $10,308 -0- 2 3
7142859 9,731 -0- 3
7166534 4,107 $822 3 2
1 Distribution amount equals accumulated cash value less
surrender penalty.
2 Distribution code 3 is defined as a distribution on
account of a disability, which is not subject to the 10-percent
additional tax under sec. 72(t)(2)(A)(iii).
3 Distribution code 2 is defined as an early distribution
with an applicable exception from the 10-percent additional tax
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