Alton F. Emerson - Page 17




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          Issue 4.  Whether Petitioner Is Liable for the 10-Percent                   
          Additional Tax Under Section 72(t) on IRA Distributions Totaling            
          $37,500 and $29,500 in 1995 and 1996, Respectively                          
               Under section 408(d)(1), a distribution from an IRA is                 
          taxable to the distributee in the year of distribution in the               
          manner provided under section 72.  Section 72(t)(1) provides for            
          a 10-percent additional tax on early distributions from qualified           
          retirement plans.  Section 72(t)(2) excludes qualified retirement           
          plan distributions from the 10-percent additional tax if the                
          distributions are:  (1) Made on or after the date on which the              
          employee attains the age of 59-1/2; (2) made to a beneficiary (or           
          to the estate of the employee) on or after the death of the                 
          employee; (3) attributable to the employee's being disabled                 
          within the meaning of section 72(m)(7); (4) part of a series of             
          substantially equal periodic payments (not less frequently than             
          annually) made for the life (or life expectancy) of the employee            
          or the joint lives (or joint life expectancies) of the employee             
          and his designated beneficiary; (5) made to an employee after               
          separation from service after attainment of age 55;4 (6)                    
          dividends paid with respect to stock of a corporation which are             
          described in section 404(k).  A limited exclusion is also                   
          available for distributions made to an employee for medical care            
          expenses.  See sec. 72(t)(2)(B).                                            


               4This provision, codified at sec. 72(t)(2)(A)(v), is not               
          applicable to early IRA distributions.  See sec. 72(t)(3)(A).               





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