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Discussion
The Commissioner’s determinations are presumed correct, and
generally taxpayers bear the burden of proving otherwise.2 Rule
142(a)(1); Welch v. Helvering, 290 U.S. 111, 115 (1933).
Tax deductions are a matter of legislative grace with the
taxpayer bearing the burden of proving entitlement to the
deductions claimed. Rule 142(a)(1); INDOPCO, Inc. v.
Commissioner, 503 U.S. 79, 84 (1992).
Whether the Distribution Is Includable in Income
Generally, any amount “paid or distributed out of” an IRA is
includable in gross income in the year received. Sec. 408(d)(1).
Petitioner asserts that the distribution is not income,
arguing that the distribution is a “loan-type situation”
permitted under the Code and by the Internal Revenue Service for
self-employed individuals. Petitioner claims that his “intent”
was to borrow from the IRA for his business venture and to repay
the IRA at a later date.
Respondent argues that the distribution is income because
petitioner did not roll the distribution into an eligible IRA
within 60 days from receipt as required by section 408(d)(3)(A).
The Court agrees with respondent.
2Petitioner has not raised the issue of sec. 7491(a), which
shifts the burden of proof to the Commissioner in certain
situations. This Court concludes that sec. 7491 does not apply
because petitioner has not produced any evidence that establishes
the preconditions for its application.
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Last modified: November 10, 2007