- 5 - Section 408(d)(1) provides that any amount paid or distributed out of an individual retirement plan must be included in gross income by the distributee in the manner provided under section 72,2 except as otherwise provided. The term “individual retirement plan” includes an IRA. Sec. 7701(a)(37). However, the amount distributed from an individual retirement plan is not subject to tax if the amount is rolled over into an individual retirement account or individual retirement annuity within 60 days of the distribution. See sec. 408(d)(3). In the instant case, petitioner concedes that he made no rollover contribution after receiving the original check from SouthTrust Bank. Cash method taxpayers must include all items of gross income in the taxable year of actual or constructive receipt.3 Section 1.451-2(a), Income Tax Regs., sets forth the general rule for constructive receipt of income as follows: 2Sec. 72(a) provides: SEC. 72(a). General Rule for Annuities.-- Except as otherwise provided in this chapter, gross income includes any amount received as an annuity (whether for a period certain or during one or more lives) under an annuity, endowment, or life insurance contract. 3Sec. 1.446-1(c)(1)(i), Income Tax Regs., provides: (i) Cash receipts and disbursements method. Generally, under the cash receipts and disbursements method in the computation of taxable income, all items which constitute gross income (whether in the form of cash, property, or services) are to be included for the taxable year in which actually or constructively received. * * *.Page: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011