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was completed with the fifth distribution in January
1993, or in the alternative, that the November 1993
distribution represented a cost-of-living adjustment.
Held: P modified the series of substantially equal
periodic payments by receiving the $6,776 from his IRA in
November 1993 prior to the close of the 5-year period
beginning on the date of the first distribution in
December 1989, and is therefore subject to the 10-percent
recapture tax on all distributions received prior to
attaining age 59-1/2, as provided in sec. 72(t)(4),
I.R.C. Held, further: P failed to prove that the
November 1993 distribution constituted a permissible
cost-of-living adjustment.
Robert C. and Nancy L. Arnold, pro sese.
Michael F. O'Donnell and George W. Bezold, for respondent.
JACOBS, Judge: Respondent determined a $21,221 deficiency in
petitioners' Federal income tax for 1993. The deficiency arises
due to the imposition of the 10-percent recapture tax under section
72(t)(4), which was triggered by a November 1993 distribution to
Robert C. Arnold (hereinafter petitioner) from his individual
retirement account. The sole issue for decision is whether the
November 1993 distribution impermissibly modified a series of
substantially equal periodic payments.
All section references are to the Internal Revenue Code in
effect for the year in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure.
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