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Publication 721 2003 Tax Year

Publication 721
Additional Material

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Table of Contents

    Worksheet A. Simplified Method Keep for Your Records
    See the instructions in Part II of this publication under Simplified Method.

    1. Enter the total annuity payments received this year. Also, add this amount to the total for Form 1040, line 16a, or Form 1040A, line 12a 1.  
    2. Enter your cost in the plan at the annuity starting date plus any death benefit exclusion * 2.  
    Note:If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below. Otherwise, go to line 3.  
    3. Enter the appropriate number from Table 1 or 2 below. Use Table 2 if your annuity starting date is after 1997 and payments are for your life and the life of your beneficiary. Otherwise use Table 1 3.  
    4. Divide line 2 by line 3 4.  
    5. Multiply line 4 by the number of months for which this year's payments were made. If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Otherwise go to line 6 5.  
    6. Enter any amounts previously recovered tax free in years after 1986 6.  
    7. Subtract line 6 from line 2 7.  
    8. Enter the smaller of line 5 or line 7 8.  
    9. Taxable amount for year. Subtract line 8 from line 1. Enter the result, but not less than zero. Also add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b. If your Form CSA 1099R or Form CSF 1099R shows a larger amount, use the amount on this line instead 9.  
    10. Add lines 6 and 8 10.  
    11. Balance of cost to be recovered. Subtract line 10 from line 2 11.  
    Table 1 for Line 3 Above
      IF the age at
    annuity starting date was    		   AND your
    annuity starting date was—
        before November 19, 1996,
    enter on line 3     		after November 18, 1996,
    enter on line 3
      55 or under 300 360
      56–60 260 310
      61–65 240 260
      66–70 170 210
      71 or over 120 160

    Table 2 for Line 3 Above
      IF the combined ages at annuity starting date were   THEN enter on line 3      
      110 or under   410      
      111–120   360      
      121–130   310      
      131–140   260      
      141 or over   210      
    *A death benefit exclusion up to $5,000 applied to certain benefits received by survivors of employees who died before August 21, 1996.

    Worksheet B. Lump-Sum Payment Keep for Your Records
    See the instructions in Part II of this publication under Alternative Annuity Option.


    1.    		 Enter your lump-sum credit (your cost in the plan at the annuity starting date) 1.  
    2. Enter the present value of your annuity contract 2.  
    3. Divide line 1 by line 2 3.  
    4. Tax-free amount. Multiply line 1 by line 3. (Caution: Do not include this amount on line 6 of Worksheet A in this publication.) 4.  
    5. Taxable amount (net cost in the plan). Subtract line 4 from line 1. Include this amount in the total on line 16b of Form 1040 or line 12b of Form 1040A. Also, enter this amount on line 2 of Worksheet A in this publication. 5.  
     

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