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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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Last modified: May 25, 2011