David W. Chiu - Page 7

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            respondent's objections regarding Exhibit 94 and sustain                                     
            respondent's objections regarding Exhibits 8 and 10.5                                        
            IRA                                                                                          
                  The first issue we must decide is whether the $17,558                                  
            petitioner withdrew from the Varian IRA is includable in gross                               
            income, and if so, whether petitioner is subject to the 10-                                  
            percent additional tax on early distributions under section                                  
            72(t).  The parties do not dispute that petitioner withdrew                                  
            $17,558 on November 28, 1990, from a qualified IRA.  Petitioner                              
            testified that he transferred the entire amount on December 18,                              
            1990, to an account at the Hong Kong & Shanghai Banking Corp.,                               
            which, he argues, should qualify him to exclude the withdrawn                                
            amounts from income as a rollover contribution.  Respondent first                            
            disputes whether such a transfer has been demonstrated by the                                
            evidence but more importantly contends that a valid rollover did                             
            not occur in any event because the transfer was to a foreign                                 
            bank.                                                                                        




                  4The Substitute Form 1098 marked as Exhibit 9 bears the same                           
            account number as that written on six of petitioner's checks                                 
            offered by him at trial to substantiate his mortgage interest                                
            payments and received into evidence without objection by                                     
            respondent.                                                                                  
                  5Respondent's hearsay objections to Exhibits 8 and 10 are                              
            well taken, and there was no advance notice of the evidence to                               
            respondent as required for the invocation of the hearsay                                     
            exception under rule 803(24) of the Federal Rules of Evidence.                               




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