- 10 - in a retirement plan is taxed one-half to each spouse except where Congress has specified otherwise; e.g., in sections 219(f)(2), 402(e)(4)(G), and 408(g). In Karem v. Commissioner, 100 T.C. 521, 529 (1993), we held that a pension distribution subject to section 402(e)(4)(G) was taxable entirely to the participant even though his former spouse was considered a one- half owner under State community property law. Unlike the taxpayer in Powell, the taxpayer in Karem had elected the multi- year averaging method then available under former section 402(e) for computing the tax due on lump-sum distributions. As a result, the distributions were subject to former section 402(e)(4)(G), which provided that “the provisions of this subsection * * * shall be applied without regard to community property laws.” Consistent with these opinions, we hold that section 402(g) precludes taxation of petitioner’s former spouse as a distributee in recognition of her State community property interest in petitioner’s IRA’s. Accordingly, the distributions from petitioner’s IRA’s are wholly taxable to petitioner. B. Nonrecognition Under Section 408(d)(6) Petitioner alternatively contends that the distribution and transfer of his IRA proceeds pursuant to the dissolution judgmentPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011