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Potomac Electric Power Company”. The Form 1099-R issued to
petitioner by Equitable Benefits Payment Services with respect to
the annuity payments shows that the $3,146 benefits paid to
petitioner are fully taxable, and there were no employee
contributions. Furthermore, the “General Retirement Plan for
Employees of Potomac Electric Power Company” provides that
employee contributions to the plan are not allowed, and
petitioner testified that her spouse did not make any
contributions to the plan.
Petitioner did not report the annuity payments as income on
her 2000 Federal income tax return. Instead, petitioner argues
that the annuity payments are under the purview of section 101(b)
and therefore are not taxable.
Prior to repeal, section 101(b) read as follows:
(b) EMPLOYEES’ DEATH BENEFITS.--
(1)General Rule.--Gross income does not include amounts
received (whether in a single sum or otherwise) by the
beneficiaries or the estate of an employee, if such amounts
are paid by or on behalf of an employer and are paid by
reason of the death of the employee. * * *
However, this subsection does not apply to the case at hand
because it was repealed by the Small Business Job Protection Act
of 1996, Pub. L. 104-188, sec. 1402(a), 110 Stat. 1789. The
death benefit exclusion applies only to beneficiaries of
decedents that died prior to August 21, 1996. See Small Business
Job Protection Act of 1996, Pub. L. 104-188, sec. 1403(b), 110
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