Help with Teachers Retirement 403B

[arlo]

Client who is a teacher died in 2014. Received a letter from the Teachers Retirement System that says "There is $4,073. in Unrecovered Contributions that were previously taxed. These unrecovered contributions are not refundable by the TRS
and may be claimed as a deduction on the deceased final federal tax return. Refer to Publication 575. I looked and could not find anything concerning this. Also looked at Pub 571. I need to find where this is to be reported on her final return.
Any help would be appreciated.

[Koss]

Schedule A, line 28

Was the annuity start date after 1986?

See page 12 of IRS Publication 575 (2014), Pension and Annuity Income.

It says:

Exclusion limited to cost. If your annuity starting date is after 1986, the total amount of annuity income that you can exclude over the years as a recovery of the cost cannot exceed your total cost. Any unrecovered cost at your (or the last annuitant's) death is allowed as a miscellaneous itemized deduction on the final return of the decedent. This deduction is not subject to the 2%-of-adjusted-gross-income limit.

Example 1. Your annuity starting date is after 1986, and you exclude $100 a month ($1,200 a year) under the Simplified Method. The total cost of your annuity is $12,000. Your exclusion ends when you have recovered your cost tax free, that is, after 10 years (120 months). After that, your annuity payments are generally fully taxable.

Example 2. The facts are the same as in Example 1, except you die (with no surviving annuitant) after the eighth year of retirement. You have recovered tax free only $9,600 (8 × $1,200) of your cost. An itemized deduction for your unrecovered cost of $2,400 ($12,000 – $9,600) can be taken on your final return.

BMK