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checks each in the amount of $150,000 to Farmer’s New World Life
Insurance Company. Each $150,000 check was issued for an
individual retirement account (IRA) in the name of each of
decedent’s three children.
On decedent’s 2000 Form 1040, U.S. Individual Income Tax
Return, the personal representative reported the lump-sum
distribution from decedent’s TIAA-CREF accumulated annuity fund
as reported on the Form 1099-R. However, the personal
representative erroneously reported the taxable amount of the
distribution to be $149,949.2
On decedent’s Form 706, United States Estate (and
Generation-Skipping Transfer) Tax Return, the personal
representative included the remaining balance of decedent’s TIAA-
CREF accumulated annuity funds in decedent’s gross estate.3 On
Form 1041, U.S. Income Tax Return for Estates and Trusts,
decedent’s estate did not report any amount with respect to
2 This amount reflects the taxable amount of the
distribution reported on the Form 1099-R, Distributions From
Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs,
Insurance Contracts, etc., less the $450,000 received by
decedent’s three children. The personal representative
erroneously determined that the $450,000 received by decedent’s
three children for the three IRAs was a tax-free “roll-over”
under sec. 403(b)(8).
3 After decedent’s death, TIAA-CREF computed the 25 percent
death benefits distribution to the charitable beneficiaries based
upon the balance in the annuity fund after the $600,000
distribution to decedent.
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Last modified: May 25, 2011