Joe M. and Patricia M. Brown - Page 18

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          Petitioner's Physical Condition At Trial                                    
               Petitioner's physical condition at the time of trial was               
          essentially the same as petitioner's physical condition                     
          immediately before receiving the Transfer Refund in October 1989.           
               At trial, petitioner was unable to stand with reasonable               
          effort and was unable to assume the witness stand without risk of           
          safety to himself.  The evidence of significant physical pain was           
          apparent from petitioner's demeanor.                                        
                              ULTIMATE FINDING OF FACT                                
               Petitioner was disabled within the meaning of section                  
          72(m)(7) immediately before receiving the Transfer Refund in                
          October 1989.                                                               
                                       OPINION                                        
          I.  Rollover Issue                                                          
               We must first decide whether the Transfer Refund received by           
          petitioner in 1989 from the Retirement System qualifies for tax-            
          free rollover treatment under section 402(a)(5).  The resolution            



          Retirement Systems in the amount of $103.  Petitioners have                 
          conceded the first two adjustments.  See supra note 6.  However,            
          respondent did not offer any evidence at trial regarding the                
          third adjustment and therefore did not carry her burden of proof            
          in respect of that adjustment or the correlative adjustments                
          under secs. 72(t), 4980A.  Accordingly, petitioners are not                 
          liable for any increase in tax (whether under secs. 1, 72(t), or            
          4980A) attributable to the $103 adjustment related to additional            
          income from Maryland State Retirement Systems.                              







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