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1998, we hold that we have jurisdiction to adjudicate
petitioner’s Federal tax liability for the year in issue.
Individual Retirement Account
Respondent determined that petitioner received taxable
distributions from his IRA during the year in issue of $12,905.89
and that petitioner failed to include $6,9054 of that amount in
gross income for the 1996 taxable year.
Petitioner contends that he is entitled to exclude from
gross income $6,905.89 of the IRA distribution on the grounds
that he had a basis in the IRA contributions.
Section 408(d)(1) provides generally that “any amount paid
or distributed out of an individual retirement plan shall be
included in gross income by the payee or distributee, as the case
may be, in the manner provided under section 72.” The term
“individual retirement plan” includes an IRA. Sec.
7701(a)(37)(A).
For this purpose, all IRA’s are treated as one contract, all
distributions during any taxable year are treated as one
distribution, and the value of the contract, the income on the
contract, and the investment in the contract are computed as of
4 Though petitioner failed to include $6,905.89 of IRA
distributions in gross income on his 1996 Federal income tax
return, respondent determined in the notice of deficiency that
the correct amount includable in gross income for the 1996
taxable year was $6,905.
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