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determined to be taxable and includable in income. Petitioner
concedes that he received the distribution in this amount.
Petitioner argues that, although he received this income, he
used the funds to try to establish his mail order business.
Petitioner testified that whatever income he had was spent
compiling information for his business. It is not entirely clear
from petitioner's testimony the basis he is alleging for
exclusion of the funds from income.
Gross income means all income from whatever source derived.
See sec. 61(a). Petitioner has not asserted any basis under the
tax laws for exclusion of this amount from income. Petitioner
must include the amount received in his gross income as provided
under section 61(a). Respondent is, therefore, sustained on this
issue.
3. 10-Percent Additional Tax on Early Distribution From
Qualified Retirement Plan
In 1994, petitioner received a retirement distribution in
the total amount of $1,422. Respondent determined $440 of this
amount to be taxable, and determined a 10-percent additional tax
in the amount of $44 due to a premature distribution of
petitioner's retirement fund. Section 72(t) provides for a 10-
percent additional tax on the taxable amount of an early
distribution from a qualified retirement plan. Section 72(t)(2)
provides exceptions to the tax for certain types of distributions
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