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OPINION
Petitioners do not dispute respondent's treatment of
the principal amounts of the 1990 and 1991 loans as deemed
distributions in the respective years of receipt. However,
petitioners contend that the 1986 loans, together with
accrued interest, should be treated as distributions in
1987 rather than 1991, as determined by respondent. In
addition, petitioners contend that respondent erred in
treating the unpaid interest that accrued during 1990 and
1991 on all of the outstanding loans, except the 1986
loans, as taxable distributions in those respective years.
Petitioners bear the burden of proving that respondent's
determinations are erroneous. See Rule 142(a). All Rule
references are to the Tax Court Rules of Practice and
Procedure.
Section 402(a) provides that "the amount actually
distributed to any distributee by any employees' trust
described in section 401(a) * * * shall be taxable to [the
distributee], in the year in which so distributed, under
section 72 (relating to annuities)." Section 72(p)(1)(A)
provides generally that a loan from a qualified employer
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Last modified: May 25, 2011