Zedaker v. Commissioner
United States Tax Court
T.C. Summ. Op. 2011-64 (2011)
Zedaker worked for the state of California as a teacher. In 1986, Zedaker resigned and withdrew all of the funds in her state retirement account. Zedaker paid all required taxes on the withdrawal. In 1991, Zedaker became a teacher again and redeposited $149,553.01 in her state retirement account. In 2004, Zedaker turned 60 and retired, and the annuity from her retirement account began. In 2008, Zedaker’s annual gross distribution from the account was $19,100. The state reported to Zedaker on Form 1099-R that $13,311 of her distribution was taxable. Zedaker did not report any of the $19,100 on her 2008 income tax return. The Internal Revenue Service (IRS) issued a notice of deficiency based on section 72(d) of the Internal Revenue Code, which permitted taxpayers to exclude from gross income any portion of annuity payments from an employer retirement plan that equaled less than the taxpayer’s contribution to the plan divided by the number of anticipated annuity payments. Zedaker argued that all distributions she received from her annuity should be tax-free until she recovered her full contribution into the retirement account. Zedaker argued that after that recovery, all distributions she received from her annuity should be taxed in full. Otherwise, Zedaker argued, she would not be able to recover her full contribution until she was 90 years old, past her life expectancy. The IRS moved for summary judgment.
Rule of Law
Holding and Reasoning (Armen, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 724,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.Unlock this case briefRead our student testimonials
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.Learn about our approachRead more about Quimbee
Here's why 724,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 45,600 briefs, keyed to 983 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.