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Not having seen this letter, Mr. Browne believed that in
order to avoid current tax on the transfer refund distribution,
Mr. Mitchell should have rolled it over within 60 days of the
distribution into an eligible retirement plan, such as an IRA.
He learned from petitioner that this had not been done.
Notwithstanding the failure to execute a timely rollover,
Mr. Browne advised petitioner to effect a rollover by opening
IRA’s with the proceeds from the distribution. He did not advise
her that a rollover would be ineffective because untimely;
rather, he told her to roll over the proceeds and referred her to
a financial adviser for that purpose. At the end of June 1992,
with the assistance of the financial adviser recommended to her
by Mr. Browne, petitioner sold the Treasury securities and opened
four separate IRA’s--two with initial investments of $130,000,
and two more in the initial amount of $97,500, or a total of
$455,000. She also placed $162,500 in a non-IRA account with an
investment service, bringing her total amount invested, including
the IRA’s, to $617,500.
In June or July 1992, Mr. Browne prepared a joint 1991
Federal income tax return on behalf of petitioner and her
deceased husband. The return reflected the receipt of the
transfer refund distribution of $666,564.41. The return as filed
included Forms 1099-R issued by the State of Maryland reflecting
that $629,083.14 of the transfer refund was fully taxable.
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