10-percent additional tax for taxable distributions from modified endowment contracts
(1) Imposition of additional tax
(1)Imposition of additional tax#
If any taxpayer receives any amount under a modified endowment contract (as defined in section 7702A), the taxpayer’s tax under this chapter for the taxable year in which such amount is received shall be increased by an amount equal to 10 percent of the portion of such amount which is includible in gross income.
(2)Subsection not to apply to certain distributions#
Paragraph (1) shall not apply to any distribution—
(A) made on or after the date on which the taxpayer attains age 59½,
(B) which is attributable to the taxpayer’s becoming disabled (within the meaning of subsection (m)(7)), or
(C) which is part of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the taxpayer or the joint lives (or joint life expectancies) of such taxpayer and his beneficiary.
(2)(A)#
made on or after the date on which the taxpayer attains age 59½,
(2)(B)#
which is attributable to the taxpayer’s becoming disabled (within the meaning of subsection (m)(7)), or
(2)(C)#
which is part of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the taxpayer or the joint lives (or joint life expectancies) of such taxpayer and his beneficiary.