Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 63-99

1963-1 C.B. 10

Sec. 37

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Rev. Rul. 63-99

An insurance broker, upon his retirement from the active solicitation and servicing of general insurance, placed his accounts with an active insurance brokerage company. The company agreed to service the policyholders and, while such accounts remain on its books, pay the broker a percentage of the renewal commissions on the policies which are renewed.

Held , the amounts of the renewal commissions received by the broker from the brokerage firm represent compensation for personal services previously rendered and constitutes earned income as defined in section 911(b) and section 37(g) of the Internal Revenue Code of 1954. Accordingly, such amounts must be taken into account in determining the limitation on retirement income under section 37(d)(2) of the Code.

See Estate of Thomas F. Remington v. Commissioner , 9 T.C. 99 (1947), in which it was held that the receipt of insurance commissions by the estate of an insurance broker, pursuant to a contract with a general brokerage firm made by the decedent prior to his death, represents the proceeds of the decedent's personal services rendered during his lifetime.