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(WEC) until 1991. In July 1991, petitioner ceased employment at
WEC, moved to Georgia, and began working for Westinghouse
Savannah River Co. (WSR).
Petitioners purchased a home in Evans, Georgia, on September
30, 1991, for $219,900. They sold their home in Pittsburgh on
October 15, 1991, for $112,000. To finance a portion of the
purchase price of the new home, petitioner withdrew a total of
$51,002 from his WEC savings program, a qualified retirement
plan, by two requests dated July 12, 1991. The withdrawals
constituted only a portion of the savings plan. As of June 30,
1991, petitioner's Statement of Accounts from the savings plan
shows that he had a total of $24,153.63 in "after-tax
contributions". We assume that between June 30th and the date of
distribution, petitioner made some additional after-tax
contributions. At the time of the withdrawal petitioner had
contributed approximately $25,000 to the savings plan all of
which was withdrawn. A statement for December 31, 1991, shows no
after-tax contributions remaining in petitioner's account. WEC
issued a Form 1099-R for 1991 reporting $25,709 of the gross
distribution as taxable income to petitioner. Petitioners
apparently did not receive the Form 1099-R until after they filed
their Federal income tax return for 1991.
Petitioners did not report any income as a result of the
distribution on their 1991 joint Federal income tax return. In
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