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distribution. Secs. 402(a)(5), 408(d)(3). We note that an IRA
includes only trusts created or organized in the United States.
Sec. 408(a).
On February 27, 1989, petitioner directed that $250,000 be
transferred from his IRA account No. 435 to a new account, Cash
Reserve IRA, account No. 26000137860 (account no. 860). On
December 4, 1989, petitioner caused a distribution of $90,000 from
account No. 860. (By stipulation, petitioner conceded that the
1989 distribution of $90,000 was taxable income to him during that
year.) On December 31, 1989, petitioner's IRA's had values of
$227,906.56 in account No. 435 and $177,642.40 in account No. 860
(totaling $405,548.96). Petitioner concedes that he caused
distributions of $408,6236 from account Nos. 435 and 860 in 1990.
At some point, petitioner established three foreign conduit
trusts to diversify his investments (Yankee Trust, Fir Trust in
Gibraltar, and France Trust with Sovereign Management Services,
N.V., in Luxembourg). Petitioner asserts that he transferred funds
into a Barclays Bank account in the Isle of Man, which renders his
1990 distribution tax free.
We do not agree with petitioner that the 1990 distribution
from his IRA at USTCNY was a tax-free transaction. Petitioner
failed to present any evidence that the $408,623 was transferred to
6 The record does not explain the discrepancy between the
$405,548.96 and $408,623 amounts.
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