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Petitioner's election to transfer from the Retirement System to
the Pension System was effective October 1, 1989.2
As a result of her election to transfer to the Pension
System, petitioner received a distribution (the Transfer Refund)
from the Retirement System in the amount of $342,956.85.
Petitioner received the Transfer Refund in the form of a check
dated October 31, 1989, from Maryland State Retirement Systems.
Petitioner's Transfer Refund consisted of $31,422.04 in
previously taxed contributions made by petitioner during her
employment tenure with the public schools, $2,169.77 in taxable
employer "pick-up contributions",3 and $309,365.04 of taxable
earnings in the form of interest. The earnings and "pick-up
contributions", which total $311,534.81, constitute the taxable
portion of the Transfer Refund.
Rollover of Petitioner's Transfer Refund
Within 60 days of receiving the Transfer Refund, petitioner
deposited the taxable portion thereof, i.e., $311,534.81, into
three individual retirement accounts (IRA's), as follows:
Petitioner deposited $221,534.81 of the Transfer Refund into
an IRA with Fidelity Investment Mutual Funds (the Fidelity IRA).
2 For a discussion of the Retirement System and the Pension
System, see generally Hylton v. Commissioner, T.C. Memo. 1995-27;
Hoppe v. Commissioner, T.C. Memo. 1994-635; Hamilton v.
Commissioner, T.C. Memo. 1994-633; Conway v. United States, 908
F. Supp. 292 (D. Md. 1995); Maryland State Teachers Association
v. Hughes, 594 F. Supp. 1353, 1357-1358 (D. Md. 1984).
3 See sec. 414(h)(2).
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