Harold L. and Gladys M. Humberson - Page 2

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          Opinion of the Special Trial Judge, which is set forth below.               
                         OPINION OF THE SPECIAL TRIAL JUDGE                           
               ARMEN, Special Trial Judge:  Respondent determined a                   
          deficiency in petitioners' Federal income tax for the taxable               
          year 1990 in the amount of $33,676.17.  This amount includes the            
          10-percent additional tax imposed by section 72(t) on early                 
          distributions from qualified retirement plans.                              
               The pivotal issue for decision is whether the Transfer                 
          Refund distribution received by petitioner Harold L. Humberson in           
          1990 from the Maryland State Teachers' Retirement System                    
          qualifies for forward averaging under section 402(e)(1).  The               
          resolution of this issue turns on whether the Transfer Refund               
          distribution constitutes a "lump sum distribution" within the               
          meaning of section 402(e)(4)(A).                                            
               Also for decision are: (1) Whether petitioners are liable              
          for the 10-percent additional tax imposed by section 72(t) on an            
          early distribution from a qualified retirement plan; and, if                
          petitioners are liable for any deficiency in tax, (2) whether               
          they are liable for interest on such deficiency.                            
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated, and they are                   
          generally so found.2  Petitioners resided in Grantsville,                   
          Maryland, at the time their petition was filed with the Court.              

          2 See infra notes 4 and 5.  See also infra note 17 regarding                
          respondent's claim of an increased deficiency.                              

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