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During tax year 1992, the Bank of New Hampshire foreclosed
on the timeshares. Petitioners received $15,000 in proceeds for
each unit, resulting in a loss totaling $59,700.
OPINION
Petitioners have the burden of proof for all of the issues
discussed below. Rule 142(a); Welch v. Helvering, 290 U.S. 111,
115 (1933).
Issue 1. Distribution Under a Qualified Plan
Petitioners argue that the $9,109.93 amount of the
outstanding loan proceeds was not income to them when the gross
distribution was received.2 We disagree. Petitioner received a
gross distribution of $25,313.22 from his pension plan account,
and this amount was reduced, or offset,3 by the amount of the
outstanding loan balance of $9,109.93. Petitioner received a
check for only $16,203.29 because of the outstanding loan.
2 For convenience, we occasionally refer to the loan or
loans as a loan. We do not make a finding that this case
involved one loan rather than multiple loans. As discussed
infra, there is very little evidence about the loan or loans in
question.
3 A proposed regulation issued by respondent uses the term
"plan loan offset" to refer to the amount of an outstanding loan
that is deducted from the account balance upon distribution.
Sec. 1.72(p)-1, Q&A-13, Proposed Income Tax Regs., 60 Fed Reg.
66233, 66237 (Dec. 21, 1995). Proposed regulations carry no more
weight than a position advanced by respondent on brief. F.W.
Woolworth Co. v. Commissioner, 54 T.C. 1233, 1265-1266 (1970).
Our use of the word "offset" does not indicate any reliance on
the proposed regulation.
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