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A "partial distribution" is defined as "any distribution to
an employee of all or any portion of the balance to the credit of
such employee in a qualified trust; except that such term shall
not include any distribution which is a qualified total
distribution". Sec. 402(a)(5)(E)(v). The parties agree that the
Transfer Refund was not a qualified total distribution.8
In order to be eligible for tax-free rollover treatment, the
"partial distribution" must be "payable as provided in clause
(i), (iii), or (iv) of subsection (e)(4)(A) (without regard to
the second sentence thereof)". Sec. 402(a)(5)(D)(i)(I). As
relevant herein, section 402(e)(4)(A) provides that a
distribution must be made either "(i) on account of the
employee's death", "(iii) on account of the employee's separation
from the service", or "(iv) after the employee has become
disabled". Petitioners do not contend that the Transfer Refund
was received either on account of petitioner's death or after any
disability. Therefore, our analysis is limited to section
402(e)(4)(A)(iii), i.e., the requirement that the distribution be
made "on account of the employee's separation from the service".
8 See Humberson v. Commissioner, T.C. Memo. 1995-470;
Pumphrey v. Commissioner, T.C. Memo. 1995-469; Dorsey v.
Commissioner, T.C. Memo. 1995-97; Brown v. Commissioner, T.C.
Memo. 1995-93; Hoppe v. Commissioner, T.C. Memo. 1994-635;
Hamilton v. Commissioner, T.C. Memo. 1994-633; Sites v. United
States, 75 AFTR 2d 95-2503 at 95-2507, 95-1 USTC par. 88,029 (D.
Md. 1995).
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