Alfred E. Gallade - Page 2

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               Kenneth M. Barish, James R. McDaniel, and Bruce L. Ashton,             
          for petitioner.                                                             
               Paul B. Burns, for respondent.                                         


               GERBER, Judge:  Respondent alternatively determined a                  
          $540,716 income tax deficiency and a $135,179 addition to tax               
          under section 66611 for the 1985 tax year, or a $537,808 income             
          tax deficiency and a $107,562 addition to tax under section 6661            
          for the 1986 tax year.  The issues remaining for our                        
          consideration are:  (1) Whether petitioner’s waiver of his                  
          pension plan benefits and use of them by his wholly owned                   
          corporation resulted in a taxable distribution to him; (2) if it            
          is a taxable distribution, whether it is recognizable in 1985 or            
          1986; and (3) whether petitioner is liable for an addition to tax           
          under section 6661.                                                         
                                  FINDINGS OF FACT2                                   
               Petitioner resided in Fontana, California, at the time of              
          the trial of these consolidated cases.  Petitioner was married to           
          Adele M. Gallade (ex-wife) during the period under consideration,           
          except for an interim period when they were divorced (January 20            


          1 Unless otherwise indicated, section references are to the                 
          Internal Revenue Code in effect for the years at issue, and the             
          Rule references are the Tax Court Rules of Practice and                     
          Procedure.                                                                  
          2 The stipulation of facts and exhibits are incorporated                    
          herein by this reference.                                                   




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