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his or her spouse or former spouse (nonparticipant spouse), and
(2) such transfer must have been made under a section 71(b)(2)(A)
divorce or separation instrument. See Bunney v. Commissioner,
114 T.C. 259, 265 (2000).
The first requirement under section 408(d)(6) is that the
IRA participant transfer his or her interest in the IRA to the
nonparticipant spouse. The parties disagree as to the meaning of
the word “interest” in this context.1 Petitioner asserts that
“interest” is synonymous with the money or other assets that
comprise an IRA account and that the transfer of distributed IRA
funds by way of an endorsed check is a transfer of an interest in
the IRA. Respondent asserts that the endorsement was not a
transfer of the petitioner’s interest in his IRA because
petitioner’s interest in the IRA was extinguished as of the time
he withdrew the funds.
We agree with respondent. The transfer of IRA assets by a
distributee to a nonparticipant spouse does not constitute the
transfer of an interest in the IRA under section 408(d)(6). See
Bunney v. Commissioner, supra at 265; Czepiel v. Commissioner,
T.C. Memo. 1999-289. The fact that petitioner endorsed the
1In Bunney v. Commissioner, 114 T.C. 259, 265 n.6 (2000), we
acknowledged two commonly used methods of transferring an
interest in an IRA, as described in IRS Publication 590; to wit,
(1) Changing the name on the IRA to that of the nonparticipant
spouse or (2) directing the trustee of the IRA to transfer the
IRA assets to the trustee of an IRA owned by the nonparticipant
spouse.
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