[Code of Federal Regulations]
[Title 26, Volume 2]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.72-12]

[Page 264]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.72-12  Effect of taking an annuity in lieu of a lump sum upon 
the maturity of a contract.

    If a contract to which section 72 applies provides for the payment 
of a lump sum in full discharge of the obligation thereunder and the 
obligee entitled thereto, prior to receiving any portion of such lump 
sum and within 60 days after the date on which such lump sum first 
becomes payable, exercises an option or irrevocably agrees with the 
obligor to take, in lieu thereof, payments which will constitute 
``amounts received as an annuity'', as that term is defined in paragraph 
(b) of Sec. 1.72-2, no part of such lump sum shall be deemed to have 
been received by the obligee at the time he was first entitled thereto 
merely because he would have been entitled to such amount had he not 
exercised the option or made such an agreement with the obligor.