(a) In general. Pensions and retirement allowances paid either by the Government or by private persons constitute gross income unless excluded by law. Usually, where the taxpayer did not contribute to the cost of a pension and was not taxable on his employer's contributions, the full amount of the pension is to be included in his gross income. But see sections 72, 402, and 403, and the regulations thereunder. When amounts are received from other types of pensions, a portion of the payment may be excluded from gross income. Under some circumstances, amounts distributed from a pension plan in excess of the employee's contributions may constitute long-term capital gain, rather than ordinary income.
(b) Cross references. For the inclusion of pensions in income for the purpose of the retirement income credit, see section 37 and the regulations thereunder. Detailed rules concerning the extent to which pensions and retirement allowances are to be included in or excluded from gross income are contained in other sections of the Code and the regulations thereunder. Amounts received as pensions or annuities under the Social Security Act (42 U.S.C. ch. 7) or the Railroad Retirement Act (45 U.S.C. ch. 9) are excluded from gross income. For other partial and total exclusions from gross income, see the following:
(1) Annuities in general, section 72 and the regulations thereunder;
(2) Employees' annuities, sections 402 and 403 and the regulations thereunder;
(3) References to other acts of Congress exempting veterans' pensions and railroad retirement annuities and pensions, section 122.
[T.D. 6500, 25 FR 11402, Nov. 26, 1960, as amended by T.D. 6856, 30 FR 13316, Oct. 20, 1965]
Notes of Decisions
Cited in
26
cases, 1981–2017 · leading case:
Mitchell v. Comm'r, 131 T.C. 215 (Tax Ct. 2008).
Mitchell v. Comm'r, 131 T.C. 215 (Tax Ct. 2008).
· cites it 2× “61-2(a)(1), Income Tax Regs. ; sec. 1.61-11(a), Income Tax Regs.”
Connelly v. Comm'r, 82 T.C. 608 (Tax Ct. 1984).
· cites it 4× “The theory underlying this exclusion is that a portion of each payment received under an annuity contract normally represents part return of the original capital *94 invested and part income earned on the *616 investment.”
Ernle v. Comm'r, 2010 T.C. Memo. 237 (Tax Ct. 2010).
· cites it 2× “We therefore sustain respondent's determination that petitioner received $35,792 in unreported income for 2007.”
Barnes v. Dist. of Columbia, 611 F. Supp. 130 (D.D.C. 1985).
“§ 61 (a)(ll); 26 C.F.R. § 1.61-11 ), and state governments are necessarily free to legislate in similar areas.”
Berglund v. Comm'r, 1995 T.C. Memo. 536 (Tax Ct. 1995).
· cites it 2× “The amounts reported on the 1986 and 1987 returns are the same as those listed on the Forms W-2p attached to the returns.”
McCarty v. McCarty, 453 U.S. 210 (1981).
· cites it 2× “§ 61 (a) (11); 26 CFR § 1.61-11 (1980). [8] At the time the interlocutory judgment of dissolution was entered, appellant had not begun to receive retired pay, since he had not yet completed 20 years of active service.”
Toombs v. Comm'r, 2013 T.C. Summary Opinion 51 (Tax Ct. 2013).
· cites it 4× “61-11(a), Income Tax Regs. For a taxpayer who uses the cash receipts and disbursements method of accounting, such as petitioner, an item is includible in gross income in the year in which the item is actually or constructively received.”
Taylor v. Comm'r, 2015 T.C. Summary Opinion 51 (Tax Ct. 2015).
· cites it 2× “Discussion I. Military Retirement Pay Section 61(a) provides that gross income means "all income from whatever source derived".”
Taylor v. Comm'r, 2017 T.C. Memo. 132 (Tax Ct. 2017).
· cites it 2× “Includibility of Retirement Payments in Gross Income Section 61(a) provides that unless a statutory exemption applies, "gross income means all income from whatever source derived".”
Dorroh v. Comm'r, 68 T.C.M. 337 (Tax Ct. 1994).
· cites it 2× “Section 61 specifically lists "pensions" as a source of gross income.”
Porter v. Comm'r, 1996 T.C. Memo. 475 (Tax Ct. 1996).
· cites it 2× “Section 61 provides that, in general, gross income means all income from whatever source derived, including *500 pensions.”
Graham v. Comm'r, 1996 T.C. Memo. 512 (Tax Ct. 1996).
· cites it 2× “61-11, Income Tax Regs. The United States Supreme Court in McCarty v.”
Annotations are extracted automatically from the opinions in the
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