[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: 26CFR1.72-14]

[Page 266-267]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.72-14  Exceptions from application of principles of section 72.

    (a) Payments of interest. If any amount is received under an 
agreement to pay interest on a sum or sums held by the obligor, such 
amount shall not be excludable from the gross income of the recipient 
under the provisions of section 72 to the extent that it is an actual 
interest payment. See section 72(j). An amount shall be considered to be 
held under an agreement to pay interest thereon if the amount payable 
after the term of the annuity (whether for a term certain or for a life 
or lives) is substantially equal to or larger than the aggregate amount 
of premiums or other consideration paid therefor. For this purpose, 
however, the aggregate amount of premiums or other consideration paid 
shall include all contributions made by an employer and not merely those 
to which section 72(f) applies.
    (b) Alimony payments. To the extent that payments made to a wife are 
includable in her gross income by reason of either or both section 71 
and 682, they shall not be excluded from the wife's gross income under 
the principles of section 72 although made under a contract to which 
that section applies. However, section 72 shall apply in the case of 
amounts received under

[[Page 267]]

such a contract if a husband and wife are entitled to make and do make a 
single return jointly.
    (c) Certain ``face-amount certificates.'' The principles of section 
72 do not apply to ``face-amount certificates'' described in section 
72(1) which were issued before January 1, 1955.
    (d) Employer plans. The provisions of Sec. Sec. 1.72-1 to 1.72-13, 
inclusive, shall be disregarded to the extent that they are inconsistent 
with the treatment of amounts received provided in section 402 (relating 
to the taxability of a beneficiary of an employees' trust), section 403 
(relating to the taxation of employee annuities), or the regulations 
under either of such sections.