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petitioners reported the entire proceeds from this sale as
capital gain. They did not report the distribution from the ESOP
on their 1994 return. In the statutory notice of deficiency,
respondent determined that petitioner had received a taxable
distribution in the amount of $9,320 which was subject to the
section 72(t) 10-percent additional tax on qualified retirement
plan distributions.
The first issue for decision is whether petitioners are
required to include in their gross income any amount of the
distribution of petitioner's ESOP account.
In general, an ESOP is defined as a stock bonus plan which
meets the requirements of section 401(a). Sec. 4975(e)(7).
Petitioners argue that petitioner's Gillette ESOP account was not
a "retirement account" because it was "set up without her
knowledge or consent", and she had "no choice in participating"
in the plan. However, they introduced no documentary evidence
which supports their position. To the contrary, letters received
by petitioner as an ESOP participant from the plan as well as
other documents submitted as evidence of her account balance
convince us that the Gillette ESOP was a qualified stock bonus
plan, and we so conclude.
Section 402(a) generally provides that any amount actually
distributed from a section 401(a) qualified stock bonus plan
shall be taxable to the distributee as provided in section 72.
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