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140.063 Exemption of annuities or other payments under employees' trusts -Retirement annuities -- Individual retirement bonds, accounts, and
annuities.
(1)
(2)
There shall be excluded from taxation under KRS Chapter 140, to the extent
attributable to employer's contributions, the value of an annuity or other
payment receivable by any beneficiary (other than the executor or equivalent)
under:
(a) An employee's trust (or under a contract purchased by an employee's
trust) forming a part of a pension, stock bonus, or profit-sharing plan
which, at the time of the decedent's separation from employment
(whether by death or otherwise), or at the time of termination of the plan if
earlier, met the requirements of Section 401(a) of the Internal Revenue
Code; or
(b) A retirement annuity contract purchased by an employer (and not by an
employee's trust) pursuant to a plan which, at the time of decedent's
separation from employment (by death or otherwise), or at the time of
termination of the plan if earlier, was a plan described in Section 403(a) of
the Internal Revenue Code; or
(c) A retirement annuity contract purchased for an employee by an employer
which is an organization referred to in Section 170(b)(1)(A)(ii) or (vi) of the
Internal Revenue Code, or which is a religious organization (other than a
trust), and which is exempt from tax under Section 501(a) of the Internal
Revenue Code; or
(d) Chapter 73 of Title 10 of the United States Code.
If amounts payable after the death of the decedent under a plan described in
paragraph (a) or (b) of subsection (1) of this section, under a contract
described in paragraph (c) of subsection (1) of this section, or under Chapter
73 of Title 10 of the United States Code are attributable to any extent to
payments or contributions made by the decedent, no exclusion shall be
allowed for that part of the value of such amounts in the proportion that the
total payments or contributions made by the decedent bears to the total
payments or contributions made. For purposes of this subsection, contributions
or payments made by the decedent's employer or former employer under a
trust or plan described in paragraph (a) or (b) of subsection (1) of this section
shall not be considered to be contributed by the decedent, and contributions or
payments made by the decedent's employer or former employer toward the
purchase of an annuity contract described in paragraph (c) of subsection (1) of
this section shall, to the extent excludable from gross income under Section
403(b) of the Internal Revenue Code, not be considered to be contributed by
the decedent. This subsection shall apply to all decedents dying after
December 31, 1953. For purposes of this subsection, contributions or
payments on behalf of the decedent while he was an employee within the
meaning of Section 401(c)(1) of the Internal Revenue Code made under a trust
or plan described in paragraph (a) or (b) of subsection (1) of this section shall,
to the extent allowable as a deduction under Section 404 of the Internal
Revenue Code, be considered to be made by a person other than the
decedent and, to the extent not so allowable shall be considered to be
(3)
(4)
(5)
(6)
contributions or payments made by the decedent. For purposes of this
subsection, amounts payable under Chapter 73 of Title 10 of the United States
Code are attributable to payments or contributions made by the decedent only
to the extent of amounts deposited by him pursuant to Section 1438 or 1452(d)
of such Title 10. This subsection shall apply to all decedents dying after
January 1, 1972.
There shall be excluded from taxation under KRS Chapter 140 the value of an
annuity receivable by any beneficiary (other than the executor) under:
(a) An individual retirement account described in Section 408(a) of the
Internal Revenue Code.
(b) An individual retirement annuity described in Section 408(b) of the
Internal Revenue Code.
(c) A retirement bond described in Section 409(a) of the Internal Revenue
Code.
If any payment to an account described in paragraph (a) of subsection (3) of
this section or for an annuity described in paragraph (b) of subsection (3) of
this section or a bond described in paragraph (c) of subsection (3) of this
section was not allowable as a deduction under Section 219 or 220 of the
Internal Revenue Code and was not a rollover contribution described in Section
402(a)(5), 403(a)(4), Section 403(b)(8) (but only to the extent such contribution
is attributable to a distribution from a contract described in subsection
408(c)(3)), 408(d)(3), or 409(b)(3)(C) of the Internal Revenue Code, the
preceding sentence shall not apply to that portion of the value of the amount
receivable under such account, annuity, or bond (as the case may be) which
bears the same ratio to the total value of the amount so receivable as the total
amount which was paid to or for such account, annuity, or bond and which was
not allowable as a deduction under Section 219 or 220 of the Internal Revenue
Code and was not such a rollover contribution bears to the total amount paid to
or for such account, annuity, or bond. For purposes of this subsection, the term
"annuity" means an annuity contract or other arrangement providing for a
series of substantially equal periodic payments to be made to a beneficiary
(other than the executor) for his life or over a period extending for at least
thirty-six (36) months after the date of the decedent's death.
Except to the extent required by differences between KRS Chapter 140 and its
application and the federal estate tax law and its application, the relevant
Internal Revenue Code regulations and the relevant administrative and judicial
interpretations of the federal estate tax law shall be as nearly as practicable
adopted and followed in the application of this section.
For the purposes of this section the term "Internal Revenue Code" shall mean
the Internal Revenue Code as amended through December 31, 1980.
Effective:July 15, 1982
History: Amended 1982 Ky. Acts ch. 387, sec. 7, effective July 15, 1982. -Created 1974 Ky. Acts ch. 141, sec. 1.
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