Stephen R. Jones - Page 6

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          distribution check to his wife, rather than first depositing the            
          funds in his own bank account, does not change the result.                  
          Section 408(d)(6) offers a means to avoid having the interest               
          transfer treated as a distribution.  See sec. 1.408-4(g)(1),                
          Income Tax Regs.2  It does not permit the IRA participant to                
          allocate to a nonparticipant spouse the tax burden of an actual             
          distribution.  See Bunney v. Commissioner, supra at 265, n.7.  We           
          recognize that where a nonparticipant spouse in a divorce prefers           
          to receive cash rather than an interest in an IRA, the parties              
          may find it desirable to have the participant simply withdraw the           
          IRA funds.  However, such withdrawals do not fall under the                 
          limited exception set forth in section 408(d)(6).                           
               Respondent also contends that the transfer was not made                
          under a written instrument incident to a divorce decree within              
          the meaning of sections 408(d)(6) and 71(b)(2)(A).  In light of             
          our holding above, it is unnecessary to decide this issue.                  

               2Sec. 1.408-4(g)(1), Income Tax Regs., provides, in relevant           
               The transfer of an individual’s interest, in whole or in               
               part, in an individual retirement account, individual                  
               retirement annuity, or a retirement bond, to his former                
               spouse under a valid divorce decree or written instrument              
               incident to such divorce shall not be considered to be a               
               distribution from such an account or annuity to such                   
               individual or his former spouse * * *.                                 

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