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as private pensions. Section 72(r)(1) provides that for income
tax purposes, Tier 2 railroad retirement benefits are treated “as
a benefit provided under an employer plan which meets the
requirements of section 401(a).” Section 401(a) pensions are
treated as annuities and are taxable under section 72. Sec.
402(a).
Section 72(a) generally requires that any amount received as
an annuity be included in gross income. Under section 72(b)
“Gross income does not include that part of any amount received
as an annuity * * * which bears the same ratio to such amount as
the investment in the [annuity] contract * * * bears to the
expected return”. See also sec. 72(d). Petitioner contends that
the amount she received in 2001 as a disability annuity was a
return of her investment in the railroad retirement program and
therefore not includable in income.
Section 72 generally “does not apply to any amount received
as an accident or health benefit”. Sec. 1.72-15(b), Income Tax
Regs. Amounts received as a result of a disability are accident
or health benefits within the meaning of section 1.72-15, Income
Tax Regs. If an employer plan to which section 72 applies
specifically provides for accident or health benefits that are
attributable to employee contributions, then such portion of that
benefit is excludable from gross income under section 104(a)(3).
Sec. 1.72-15(c)(1), Income Tax Regs. On the other hand, if a
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