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(1) Income inclusion. 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.
Under Section 72(t), there is an additional tax of 10% on distributions to the taxpayer if the distribution is made before the taxpayer is age 59 ½. This applies to distributions from qualified retirement plans, which include:
72 (t) (2) (D) * Retirement plans: The 10% additional tax generally applies to early distributions from qualified plans, 403 (a) or (b) annuity plans and traditional IRAs, including IRAs that are connected to a SIMPLE IRA or SEP plan maintained by an employer.
§72. Annuities; certain proceeds of endowment and life insurance contracts. (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. (b) Exclusion ratio.
Read Internal Revenue Code (IRC) Section 72, Annuities; certain proceeds of endowment and life insurance contracts. Learn more on TaxNotes.com.
Rule 72 (t) allows for penalty-free withdrawals from individual retirement accounts (IRAs) and other tax-advantaged retirement accounts like 401 (k)s and 403 (b) plans. It is issued by the...
Section 72 of the Code governs the tax treatment of annuity contracts, as well ascertain distributions from life insurance and endowment contracts. Several of the rules in Section 72 apply differently depending on the identity