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the Hong Kong & Shanghai Banking Corp. Petitioner argued that
the Hong Kong & Shanghai Banking Corp. owns Midland Bank, a U.S.
bank, but this factor does not affect our conclusion regarding
the probable situs of any trust created in connection with the
IRA funds transfer. On this record, we conclude that petitioner
has failed to show that the $17,558 that he withdrew from the
Varian IRA was paid into a trust or custodial account created and
maintained in the United States, as required by section 408(a)
and (d)(3)(A)(i), and section 1.408-2(b), Income Tax Regs., and
therefore such amount is includable in his gross income.
Amounts paid or distributed out of an IRA must be included
in gross income "in the manner provided under section 72". Sec.
408(d)(1). A 10-percent tax on "early distributions" generally
applies where a taxpayer receives a distribution from a qualified
retirement plan which is includable in his gross income. Sec.
72(t)(1). For purposes of the 10-percent tax, a qualified
retirement plan includes an IRA described under section 408(a).
Sec. 4974(c)(4). Although section 72(t)(2) sets forth certain
exceptions to the 10-percent tax on early distributions,
petitioner has presented no evidence to suggest he fits within
any of these exceptions. Therefore, we find that petitioner is
liable for the 10-percent additional tax under section 72(t).
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