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After concessions by the parties,6 the issues for decision
are as follows:
(1) Whether the Transfer Refund distribution received by
petitioner Joe M. Brown in 1989 from the Maryland State
Employees' Retirement System qualifies as a partial distribution
eligible for tax-free rollover treatment under section 402(a)(5);
(2) whether petitioners must include in their gross income
for 1990, the amount distributed from petitioner's individual
retirement account during that year;
(3) whether petitioners are liable for the 10-percent
additional tax under section 72(t) for 1989 and 1990; and
(4) whether petitioner Joe M. Brown is liable for the 6-
percent excise tax under section 4973 for 1989 and the 15-percent
excise tax under 4980A for 1989 and 1990.7
Generally speaking, the resolution of the foregoing issues
turns on whether petitioner Joe M. Brown was disabled, within the
meaning of section 72(m)(7), immediately before receiving the
6 For 1989, respondent concedes that the 6-percent excise
tax imposed by sec. 4973 should be calculated based on an excess
contribution of $148,000 rather than $150,000. Respondent also
concedes that petitioner Patricia M. Brown is not liable for: (1)
The excise taxes under secs. 4973 and 4980A for 1989, or (2) the
excise tax under sec. 4980A for 1990.
For 1990, petitioners concede: (1) They failed to report
interest income from the First National Bank of Maryland in the
amount of $512, and (2) they are only entitled to a deduction for
mortgage interest in the amount of $3,262, rather than in the
amount of $5,480, as claimed on their return for that year.
7 See supra note 6 regarding respondent's concessions of the
excise taxes as to petitioner Patricia M. Brown.
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