Stephen R. Jones - Page 5




                                        - 5 -                                         
          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.                                                                     





Page:  Previous  1  2  3  4  5  6  7  8  Next

Last modified: May 25, 2011