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Count months or days to determine date when 59 1/2?

 
 
Victor Roberts
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      09-13-2005, 07:09 AM
In a previous note I mentioned that the instructions for the
NY state tax return, IT-201, state that pension payments
received after a person turns 59 1/2 are excluded from
taxable income in New York State.

The simple statement above raises two questions. First, is a
pension payment received on the day a person turns 59 1/2
excludable, or does the payment have to be received the
first day AFTER a person turns 59 1/2, per wording of the
IT-201 instructions?

Second, is the date when a person turns 59 1/2 determined by
counting months or days? That is , does the person take his
or her birth date and add six months, or is it possible to
take the day of the year when the person turns 59 and then
add 183 days to find the date when that person turns 59 1/2?
In may case, using the day calculation lets me exclude one
additional month of pension payments.

--
Vic Roberts
Replace xxx with vdr in e-mail address.

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Drew Edmundson
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      09-14-2005, 11:52 PM
Victor Roberts <> wrote:

> In a previous note I mentioned that the instructions for the
> NY state tax return, IT-201, state that pension payments
> received after a person turns 59 1/2 are excluded from
> taxable income in New York State.
>
> The simple statement above raises two questions. First, is a
> pension payment received on the day a person turns 59 1/2
> excludable, or does the payment have to be received the
> first day AFTER a person turns 59 1/2, per wording of the
> IT-201 instructions?


Since NY says "after" 59 1/2 then it would be the day after
not the day they turned 59 1/2. I am basing what NY says on
your representation. Read the law carefully to see how it
is phrased. But why not just wait the extra day to be safe?

> Second, is the date when a person turns 59 1/2 determined by
> counting months or days? That is , does the person take his
> or her birth date and add six months, or is it possible to
> take the day of the year when the person turns 59 and then
> add 183 days to find the date when that person turns 59 1/2?
> In may case, using the day calculation lets me exclude one
> additional month of pension payments.


You count months. So if you were born 6-8-1950 then you
turn 59 1/2 on 12-8-2009. At least that is how IRS counts.

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MTW
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      09-15-2005, 05:20 PM
Drew Edmundson wrote:

> You count months. So if you were born 6-8-1950 then you
> turn 59 1/2 on 12-8-2009. At least that is how IRS counts.


Actually, wouldn't you turn 59 1/2 at midnight on 12-7-2009 ???

So, if you received something on the 7th, it would be BEFORE
turning 59 1/2. If you received it on the 8th, it would be
AFTER. If you received it at exactly midnight between the
two dates, then you would have a factual dilemma on your
hands. <grin>

MTW

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Victor Roberts
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      09-15-2005, 05:20 PM
Drew Edmundson <> wrote:
> Victor Roberts <> wrote:


>> In a previous note I mentioned that the instructions for the
>> NY state tax return, IT-201, state that pension payments
>> received after a person turns 59 1/2 are excluded from
>> taxable income in New York State.
>>
>> The simple statement above raises two questions. First, is a
>> pension payment received on the day a person turns 59 1/2
>> excludable, or does the payment have to be received the
>> first day AFTER a person turns 59 1/2, per wording of the
>> IT-201 instructions?


> Since NY says "after" 59 1/2 then it would be the day after
> not the day they turned 59 1/2. I am basing what NY says on
> your representation. Read the law carefully to see how it
> is phrased.


I have not read the actual tax law, but one NYS publication
says "after" 59 1/2 as I stated in my original note and
another NYS tax publication says "on or after". I guess I
will have to contact the DTF.

> But why not just wait the extra day to be safe?


Because I will lose the exemption for a one additional
month.

>> Second, is the date when a person turns 59 1/2 determined by
>> counting months or days? That is , does the person take his
>> or her birth date and add six months, or is it possible to
>> take the day of the year when the person turns 59 and then
>> add 183 days to find the date when that person turns 59 1/2?
>> In may case, using the day calculation lets me exclude one
>> additional month of pension payments.


> You count months. So if you were born 6-8-1950 then you
> turn 59 1/2 on 12-8-2009. At least that is how IRS counts.


Do you have an IRS reference?

--
Vic Roberts
Replace xxx with vdr in e-mail address.

<< ================================================== ===== >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
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Stuart A. Bronstein
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      09-15-2005, 05:20 PM
Drew Edmundson <> wrote:

> Since NY says "after" 59 1/2 then it would be the day after
> not the day they turned 59 1/2.


I'd calculate it differently. The date someone turns any
age, including 59 1/2, it is the day after they have lived
59 1/2 years. Whether you calculate from midnight or even
the exact time of birth, the anniversary is "after" the
requisite number of years.

> I am basing what NY says on
> your representation. Read the law carefully to see how it
> is phrased. But why not just wait the extra day to be safe?


Can't argue with that.

Stu

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Victor Roberts
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      09-16-2005, 11:02 PM
Drew Edmundson <> wrote:
> Victor Roberts <> wrote:


>> In a previous note I mentioned that the instructions for the
>> NY state tax return, IT-201, state that pension payments
>> received after a person turns 59 1/2 are excluded from
>> taxable income in New York State.
>>
>> The simple statement above raises two questions. First, is a
>> pension payment received on the day a person turns 59 1/2
>> excludable, or does the payment have to be received the
>> first day AFTER a person turns 59 1/2, per wording of the
>> IT-201 instructions?


> Since NY says "after" 59 1/2 then it would be the day after
> not the day they turned 59 1/2. I am basing what NY says on
> your representation. Read the law carefully to see how it
> is phrased. But why not just wait the extra day to be safe?


In my earlier post I stated that two different NYS DTF
documents stated this in two different ways, one says "after
59 1/2" and the other says "59 /12 or older". So I read the
applicable section of New York State Consolidated Law, and
the wording there is that "pensions received by an
individual who has attained the age of fifty-nine and
one-half ..." So - that seems to settle this question.

--
Vic Roberts
Replace xxx with vdr in e-mail address.

<< ================================================== ===== >>
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<< and does NOT constitute legal OR professional advice. >>
<< >>
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Drew Edmundson
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      09-16-2005, 11:02 PM
Victor Roberts <> wrote:
> Drew Edmundson <> wrote:


snip

>> But why not just wait the extra day to be safe?


> Because I will lose the exemption for a one additional
> month.


Ok, I understand now. You were already receiving the
benefits prior to age 59 1/2. you must have or going to
have a distribution on or about 59 1/2.

>>> Second, is the date when a person turns 59 1/2 determined by
>>> counting months or days? That is , does the person take his
>>> or her birth date and add six months, or is it possible to
>>> take the day of the year when the person turns 59 and then
>>> add 183 days to find the date when that person turns 59 1/2?
>>> In may case, using the day calculation lets me exclude one
>>> additional month of pension payments.


>> You count months. So if you were born 6-8-1950 then you
>> turn 59 1/2 on 12-8-2009. At least that is how IRS counts.


> Do you have an IRS reference?


See Reg.1.401(a)(9)-2 for how to calculate age 70 1/2. As
this is a retirement regulation I believe it makes sense to
follow it for age 59 1/2.

For other purposes you turn an age on other dates. For
example a child turns 18 on her 18th birthday (see Rev. Rul.
2003-72) but a senior turns 65 on the day before his 65th
birthday (it is my understanding this is based on common
law). See the 1040 instructions for an example for age 65.

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<< and does NOT constitute legal OR professional advice. >>
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joeu2004@hotmail.com
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      09-16-2005, 11:02 PM
MTW wrote:
> Drew Edmundson wrote:


>> You count months. So if you were born 6-8-1950 then you
>> turn 59 1/2 on 12-8-2009. At least that is how IRS counts.


> Actually, wouldn't you turn 59 1/2 at midnight on 12-7-2009???


In part, the answer depends on what you mean by the phrase
"midnight on 12-7-2009". I suspect you misstated what you
intended to say. See below.

In any case, if you are born on 6-8-1950, then you "turn 59"
on 6-8-2009. I hope you agree with that. If not, we have a
serious "fail-ure to com-muni-cate". I think you would be
out of step with everyone else.

By analogy, you turn 59 1/2 6 months after you turn 59,
which is 12-8-2009. As Drew states correctly, the law
counts months, not days. If it counted days, we would have
a serious debate about how many days constitute "6 months".
Is it 182? Is it 183? Is it 180? (Rhetorical questions.)

> So, if you received something on the 7th, it would be BEFORE
> turning 59 1/2. If you received it on the 8th, it would be
> AFTER. If you received it at exactly midnight between the
> two dates, then you would have a factual dilemma on your
> hands. <grin>


That reveals your misunderstanding or misuse of the phrase
"midnight on 12-7-2009". Apparently you meant to say
"midnight on 12-8-2009".

Midnight on 12-7-2009 occurs one minute after 11:59pm on
12-6-2009. Midnight is the beginning of the day. This is
evidenced by the fact that midnight is 12am -- "ante
meridian" means "before noon". This is also explained
somewhere in the banking code, as I recall. I forgot where.
I briefed this several years ago.

More to the point, if you insist on your hypothesis, why do
you assume that a person would turn a particular age (e.g,
59 1/2) exactly at midnight? If you believe we determine an
"exact" age based on time of day, why wouldn't it depend on
the time of birth? (Rhetorical question.)

Anyway, I think we can show by analogy that the law -- at
least the IRS -- draws no such distinction. Consider the
definition of "holding period" in IRS Pub 550. In an
example, it states: "If you bought invested property on
February 5, 2003, and sold it on February 5, 2004, your
holding period is not more than 1 year and you have a
short-term capital gain or loss. If you sold it on February
6, 2004, your holding period is more than 1 year and you
have a long-term capital gain or loss".

Note that "not more than" means "less than or equal to". So
February 5 is "equal to". No mention of midnight or any
other time of day as a special case.

Finally, hopefully to put the question to rest, IRS Pub 575
states: "You reach age 70 1/2 on the date that is 6
calendar months after the date of your 70th birthday. For
example, if your 70th birthday was on June 30, 2004, you
reached age 70 1/2 on December 30, 2004. If your 70th
birthday was on July 1, 2004, you reached age 70 1/2 on
January 1, 2005."

Again, no mention of special cases based on time of day.

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joeu2004@hotmail.com
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      09-16-2005, 11:02 PM
Drew Edmundson wrote:

> Since NY says "after" 59 1/2 then it would be the day after
> not the day they turned 59 1/2.
> [....]
> You count months. So if you were born 6-8-1950 then you
> turn 59 1/2 on 12-8-2009. At least that is how IRS counts.


As evidenced by IRS Pub 575 states, which states: "You
reach age 70 1/2 on the date that is 6 calendar months after
the date of your 70th birthday. For example, if your 70th
birthday was on June 30, 2004, you reached age 70 1/2 on
December 30, 2004. If your 70th birthday was on July 1,
2004, you reached age 70 1/2 on January 1, 2005."

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joeu2004@hotmail.com
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      09-16-2005, 11:02 PM
Victor Roberts wrote:
> Drew Edmundson <> wrote:


>> You count months. So if you were born 6-8-1950 then you
>> turn 59 1/2 on 12-8-2009. At least that is how IRS counts.


> Do you have an IRS reference?


Not a legal citation, but probably good enough for your
purposes ....

IRS Pub 575 states: "You reach age 70 1/2 on the date
that is 6 calendar months after the date of your 70th
birthday. For example, if your 70th birthday was on
June 30, 2004, you reached age 70 1/2 on December 30,
2004. If your 70th birthday was on July 1, 2004, you
reached age 70 1/2 on January 1, 2005."

No mention of midnight or any other time of day as a
special case.

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