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Petitioner, unaware that she was required to execute various
documents in order to accomplish the desired conversion, did not
execute these documents prior to August 15, 1990. Thus, the
funds in petitioner's First American IRA's were not distributed
to and received by petitioner prior to August 15, 1990.
First American Bank distributed and petitioner received the
account balance of petitioner's IRA's, i.e., $97,227.74, on or
about November 6, 1990.
Distribution of the Fidelity IRA
Petitioners were accustomed to dealing with Fidelity by
telephone. On August 14, 1990, petitioner Richard Childs
telephoned Fidelity and requested that the account balance in
petitioner's Fidelity IRA be transferred into a non-IRA account.
Fidelity permitted customers to convert IRA's into non-IRA
accounts by instructions given over the telephone. Thus,
Fidelity effected the requested conversion, and the account
balance in petitioner's Fidelity IRA was constructively withdrawn
and received by petitioner on August 14, 1990.
Petitioners' 1989 Return
On their Federal income tax return (Form 1040) for 1989,
filed August 15, 1990, petitioners included the taxable portion
of the Transfer Refund in gross income.
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