Juanita Doby - Page 9

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          Stat. 1791.  Petitioner’s spouse died in 1999.  Therefore, the              
          present annuity payments are not subject to the death benefit               
          exclusion provided by section 101(b).                                       
               Furthermore, petitioner has not provided any evidence that             
          she or her spouse had an “investment in the contract”.  Also,               
          petitioner has not demonstrated that the annuity payments she               
          received are within any exclusion.  Therefore, the present                  
          annuity payments are taxable, and respondent’s determination on             
          this issue is sustained.                                                    
          2.  IRA Distributions                                                       
               As previously stated, gross income includes all income from            
          whatever source derived.  Sec. 61(a).  Section 61(b) specifically           
          includes items included under section 72 (relating to annuities             
          and IRAs).                                                                  
               As a general rule, amounts paid or distributed out of                  
          individual retirement plans, including IRAs, are included in                
          gross income when received by the payee or distributee under                
          provisions of section 72.  Sec. 408(d)(1).  The regulations                 
          provide in relevant part as follows:                                        
               Except as otherwise provided in this section, any amount               
               actually paid or distributed or deemed paid or distributed             
               from an individual retirement account or individual                    
               retirement annuity shall be included in the gross income of            
               the payee or distributee for the taxable year in which the             
               payment or distribution is received.                                   








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