Mark J. Vorwald - Page 4

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          (1929); see Poczatek v. Commissioner, 71 T.C. 371, 378 (1978).              
          We note that had petitioner voluntarily assigned his interest in            
          the IRA to his former spouse in connection with the debt that he            
          owed to her, the assignment would be deemed a distribution.  Sec.           
          1.408-4(a)(2), Income Tax Regs.  Furthermore, a taxpayer cannot             
          avoid the Federal income tax consequences resulting from a                  
          particular transaction by transferring the proceeds of the                  
          transaction to a creditor in satisfaction of a debt.  As noted by           
          the Supreme Court in Helvering v. Horst, 311 U.S. 112, 116                  
               If the taxpayer procures payment directly to his                       
               creditors of the items of interest or earnings due him,                
               * * * [citations omitted] he does not escape taxation                  
               because he did not actually receive the money.                         
               We understand that unlike the transfer involved in                     
          Helvering v. Horst, supra, or contemplated by the above                     
          regulation, the transfer in this case was hardly "voluntary";               
          however, we attach no significance to such a distinction.  We               
          consider the transfer to petitioner's spouse to constitute a                
          distribution to petitioner.                                                 
               Distributions from an IRA are includable in income in                  
          accordance with section 72.  Sec. 408(d).  The distribution was             
          not received by petitioner as an annuity; consequently, the                 
          provisions of section 72(e) are applicable.  Consistent with the            
          presumption of correctness applicable to respondent's                       
          determination, Welch v. Helvering, 290 U.S. 111, 115 (1933), and            

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