Arthur Kamlet wrote:

- quote -

Not really <grin> , since this is a tax benefit and, even
better, an *elective* one (so if averaging doesn't produce a
benefit, the taxpayer isn't forced to use it <grin> ).

I suspect that one is a public relations issue primarily, as
well as the IRS realizing that if they pushed this one it
logically follows that their longstanding position on the 65
year olds simply doesn't work either.

Considering the very small number of taxpayers impacted by
this (those born on January 1, 1936 who received a lump sum
distribution from a qualified plan after the effective date
of the 1986 Act), I doubt that the IRS feels this a battle
worth fighting--and certainly isn't worth the negative PR
from a published news story about the matter <grin> .

Now that said, the *law* says it applies to anyone who
attained age 50 before January 1, 1986. Section 63(f)(1)(A)
uses the same "attained age" language with reference to the
end of the year. So, arguably, if someone born on January
1, 1921 "attained age" 65 by December 31, 1985, then it
would appear someone born exactly fifteen years should have
attained age 50 by that same date <grin> .

Of course, considering that Section 24(c)(1)(B) uses exactly
the same term (attained age 17 by the end of the year) we
have a problem with consistency--but considering that there
appears to be no regulations or case law I can find to
support the "old" January 1 rule, I suspect the IRS didn't
really want to go to court on this one.

So just treat this all as a gift from our "kinder, gentler"
IRS <grin> .

--
Ed Zollars, CPA
Phoenix, Arizona

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- quote -

I don't see them flip flopping. I believe the rule they
will enforce is "born before Jan. 2". The draft 2003 Form
4972 still says Jan. 2. The draft 2003 forms for the code
sctions highlighted in the revenue ruling have been changed
to the anniversary date.

Alan
http://taxtopics.net

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- quote -

But as I asked Alan, last year for the first time the IRS
said lump-sum distribution averaging could be done for those
born before Januaru 2 1936 instead of saying, as in past
years, those born before 1936. Would you think they will
flip-flop and say "before 1936" now?

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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A.G. Kalman <agk202[at]netscape.net> wrote:
- quote -

Last year they changed the birthdate for qualifying for
Income Averaging for Lump Sum distributions of qualified
employer plans from the old "born before 1936" to "born
before Jan 2 1936."

I assume they are not backing away from that change?

Seems to me that it is better taxwise for kids to stay
"younger" longer, even if one day longer, and for older
adults to reach older age later. An exception is age for
lump sum disttributions.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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William P. Brown" <wpbrown[at]longwood.edu> wrote:

- quote -

Yes, I pointed this out in a previous post relative to 2002
tax filings. I just checked the 2003 draft of the Schedule
EIC and it has been updated to the new rule. There is no
longer any reference to a child being born prior to Jan. 2,
198X. It now asks if the child was born before 1985.

Alan
http://taxtopics.net

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A.G. Kalman wrote:

- quote -

You mean, not the day before? e.g. Dec 31st? This of
course will be advantageous to those with 16 year olds the
last day of the year

However, to be fair..... should not senior citizens born on
Jan 1st not have to wait until that first day of the new tax
year to be considered 65?

Something ain't quite right, here, gang.

Cheer$,
Harlan Lunsford, EA in LA

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Correction for link to IRS website

http://www.irs.gov/pub/irs-drop/rr-03-72.pdf

--
** Working to make "taxes less taxing" **

Ohio Tax Man - Robert Thompson
Westerville (Columbus) Ohio

To not pay more tax than the law demands.

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A.G. Kalman wrote:

- quote -

The law for years, in most/many juristictions, has been a
person attains a certain age on the day before that
particular anniversary.

Regards,
Bill
~~~~
Associate Professor of Accounting
Longwood University
Department of Accounting, Economics & Finance
http://www.longwood.edu/staff/wpbrown/
Opinions expressed by me are mine, not my employer's.

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"A.G. Kalman" <agk202[at]netscape.net> writes:

- quote -

I wonder what happens as that child ages, since for Civil
Service Retirement purposes you reach age 55 the day before
your birthday, and for tax and other purposes, you reach age
65 the day before your birthday. Guess it's all part of
simplification.

It is nice, however, that this is being interpreted in favor
of the taxpayer. If the "adult" rule was followed, parents
of a child born January 1 would miss out on one year of the
child tax credit.

Phil Marti
Topeka, KS

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The IRS has issued RR 2003-72
(http://www.irs.gov/pib/irs-drop/rr-03-72.pdf) that applies
a uniform method of determining when a child attains a
specific age for purposes of the following sections of the
Internal Revenue Code:
- 21 (dependent care credit),
- 23 (adoption credit),
- 24 (child tax credit),
- 32 (earned income credit),
-129 (dependent care assistance programs),
-131 (foster care payments),
-137 (adoption assistance programs),and
-151 (dependency exemptions).

I don't want anyone to get to excited by this, but the
United States of America as represented by the U.S.
Treasury, now says that a child attains a certain age
on the anniversary of the birth date. Duh!

Using the child tax credit as an example, a child born
on Jan. 1, 1987 is an eligible child for tax year 2003
as that child will not attain age 17 until Jan. 1, 2004.

Alan
http://taxtopics.net

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