However, the exclusion permitted by the prior sentence will apply only to the extent the repaid amount has not been previously excluded under section 122(b) and paragraph (b)(2)(i) of this section.
Gross retired pay | $11,250 |
Less: Section 122(a) exclusion | (1,250) |
Reduced retired pay | 10,000 |
Less: Retired pay waived to receive V.A. compensation | (1,000) |
Adjusted retired pay- | 9,000 |
Less: | |
(i) Excludable retired pay computed under section 104(a)(4) as limited by 10 U.S.C. 1403 | $4,500 |
(ii) Less: Retired pay, not to exceed (i), waived to receive V.A. compensation | (1,000) |
(iii) Net disability exclusion | (3,500) |
Taxable retired pay before adjustment for Dual Compensation forfeiture | 5,500 |
Less: | |
Adjustment for Dual Compensation forfeiture of $4,088 | |
5500 ÷ 9000 * $4,088 = $2,498 (rounded) | (2,498) |
Net taxable retired pay | 3,002 |
Adjusted retired pay | $9,000 | |
Less: | ||
(i) Excludable retired pay under section (a)(4) as limited by 10 U.S.C. 1403 | $4,500 | |
(ii) Excludable retired pay under section 105(d) | 5,200 | |
(iii) Total | 9,700 | |
(iv) Less: Retired pay, not to exceed (iii), waived to receive V.A. compensation "sick pay" exclusion | (1,000) | |
(v) Net disability and "sick pay" exclusion | (8,700) | |
Net taxable retired pay | 800 |
Gross retired pay (75% * $4,000) | $3,000 | |
Less: Section 122(a) exclusion | (500) | |
Reduced retired pay | 2,500 | |
Less: V.A. waiver | (1,300) | |
Adjusted retired pay | 1,200 | |
Less: | ||
(i) Section 104(a)(4) exclusion | $800 | |
(ii) Less: Retired pay, not to exceed (i), waived to receive V.A. compensation | (800) | |
(iii) Net disability exclusion | 0 | |
Net taxable retired pay | 1,200 |
26 C.F.R. §1.122-1