- 3 -
On December 13, 1993, petitioner completed a subscription
agreement to purchase 30,000 shares of GP Financial Corp. stock
at $15 a share for a total purchase price of $450,000. The Green
Point Savings Bank (Green Point) was responsible for taking the
stock orders and payments for the subscription offering.
As of December 1993, petitioner maintained Keogh accounts
and IRA's with Green Point and Apple Bank for Savings (Apple).
On December 14, 1993, petitioner's account balances in the Keogh
accounts and IRA's at Green Point totaled $327,252 and those at
Apple totaled $165,695. On December 14, 1993, petitioner made
the following withdrawals from his Keogh and IRA accounts
(amounts rounded down to the nearest whole dollar):
Type of
Bank Amount Account
Green Point $250,651 Keogh
Green Point 50,130 Keogh
Green Point 13,939 IRA
Apple 153,828 Keogh
Apple 6,377 IRA
Apple 5,489 IRA
Total $480,414
Green Point and Apple withheld Federal income tax from the
distributions of $50,130.00 and $153,828.00, respectively, in the
amounts of $12,532.58 and $30,765.62, respectively.
Petitioner used the net Keogh and IRA distributions
($437,117) plus $12,883 of his own funds to pay the $450,000
purchase price of the GP Financial Corp. stock. On January 28,
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