- 7 - Most, if not all, of these notes were prepared after the corresponding transfers, and the May 31, 1992, note is not signed. Wayne did not report any income with respect to these transfers. Each of petitioners' promissory notes contains the following terms: Repayment of principal with interest from date of transfer at a rate of 10 percent per annum; and payment in equal monthly installments commencing approximately 1 month after the date of each transfer until the earlier of repayment of principal and interest in full or 5 years from the date of the transfer. As security for each transfer, petitioners pledged their respective vested account balances. The record does not disclose the amounts of these balances at any time that is relevant herein. During 1993 and 1994, Wayne maintained an IRA with Merrill Lynch. He received $9,000 from this account in 1993 and $9,307 in 1994. He did not report any income with respect to these amounts. OPINION We must decide whether the funds received by petitioners from their retirement accounts are includable in their gross incomes. Petitioners argue that the transfers from the Plan are loans from the Plan and nontaxable to the extent of $50,000 for each petitioner. Petitioners concede that the transfers overPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011