114 T.C. No. 17
UNITED STATES TAX COURT
MICHAEL G. BUNNEY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 20713-97. Filed April 10, 2000.
Petitioner (H) and his former wife (W) were
divorced in 1992. H and W were residents of
California, a community property State. The judgment
dissolving the marriage ordered that H’s IRA’s, which
were funded with contributions that were community
property, be divided equally between H and W. In 1993,
H withdrew $125,000 from his IRA’s and transferred
$111,600 to W. Held: sec. 408(g), I.R.C., precludes
characterization of W as a 50-percent “distributee” of
H’s IRA’s under sec. 408(d)(1), I.R.C.; accordingly, H,
not W, is taxable on the distributions. Held, further,
no portion of the $111,600 paid to W is excludable from
H’s income under sec. 408(d)(6), I.R.C. Held, further,
H is liable for the sec. 72(t), I.R.C., additional tax
on the IRA distributions. Held, further, petitioner
had a reasonable basis for his position, and thus the
accuracy-related penalty for negligence under sec.
6662(a), I.R.C., applies only with respect to the
adjustments conceded by H.
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