PREC 10-97    Treatment of Alaska Native Corporation Distributions for Improved-Pension Purposes     Citation: Vet. Aff. Op. Gen Couns. Prec. 10-97, VAOPGCPREC 10-97, 1997

QUESTION PRESENTED:

Does a $1,100 cash distribution from an Alaska Native Corporation and a $16,338 dividend distribution by the corporation to a settlement trust under the Alaska Native Claims Settlement Act, both of which were made in 1993, constitute income to a veteran for improved-pension purposes?

HELD:

Pursuant to VAOPGCPREC 12-89 and VAOPGCPREC 4-93, if the nontaxable portion of a cash distribution received by a veteran from an Alaska Native Corporation represents a distribution from the Alaska Native Fund, that portion of the distribution and an interest in a settlement trust received by the veteran from the Native Corporation may be excluded from computation of income for improved-pension purposes under 38 U.S.C. § 1503(a)(6) as compensation for relinquishment of an interest in property.  If the taxable portion of the cash distribution received by the veteran was derived from revenues earned by a Native Corporation, that distribution constitutes income for improved-pension purposes.  Section 506 of Pub. L. No. 103-446, 108 Stat. 4645, 4664 (1994), which excludes from income computation for improved-pension purposes cash distributions not exceeding $2,000 per annum received by an individual from an Alaska Native Corporation, does not apply to computation of income for improved-pension purposes for periods prior to November 2, 1994, the date of its enactment.