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Supinski tried to persuade petitioner to invest the $246,647.68
cash distribution in certain financial products and to include
them in the IRA. Petitioner advised Mr. Supinski that he was
going to handle the cash distribution himself and set up his own
IRA.
On August 17, 1990, petitioner deposited $239,641.91 in
money market account No. 9 at the credit union, and he retained
the $7,005.77 difference (between the distribution and the
deposit). On February 20, 1992, petitioners withdrew $139,126
from account No. 9 and deposited it into a qualified IRA with
Charles Schwab & Co., Inc. Prior to the February 20, 1992,
transaction, petitioners had withdrawn a total of $196,919.68
from account No. 9. Of the $196,919.68, $101,475.21 was
redeposited into petitioners' regular share account with the
credit union, account No. 1. In addition, $50,000 of the
$196,919.68 was withdrawn on August 21, 1990, and used by
petitioners in connection with the building of their home.
Petitioners did not report any portion of the Plan distribution
or credit union withdrawals as income on their 1990 Federal
income tax return. Petitioners, for 1990, also failed to report
$1,971 of income from Prudential Insurance Co. and $18 of
interest income from Great American Bank.
By a letter dated June 27, 1991, the Kansas bank
acknowledged receiving petitioner's documents with which to open
an IRA, but advised that "Liquidating Trust Certificates" had not
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