Ronna Joan Robertson - Page 12




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          Woodward v. Commissioner, 397 U.S. 572 (1970); United States v.             
          Hilton Hotels Corp., 397 U.S. 580 (1970).  Accordingly, the                 
          organizational expenses of Worldly Connections, Inc., paid by               
          petitioner are not deductible on petitioner’s 1994 Federal income           
          tax return.                                                                 
               Similarly, to the extent that petitioner paid any additional           
          expenses for Worldly Connections, Inc., during the 1994 taxable             
          year out of her own pocket (e.g., $155), these expenses should              
          also be considered contributions of capital and are nondeductible           
          to petitioner on her individual Federal income tax return.  See             
          Deputy v. du Pont, supra.                                                   
          II.  Section 72(t) Tax                                                      
               Section 72(t) imposes an additional 10-percent tax on the              
          amount of an early distribution from a qualified retirement                 
          account (as defined in section 4974(c)).  See sec. 72(t).                   
          Section 72(t)(2) provides for certain exceptions to the                     
          imposition of this 10-percent tax.                                          
               Petitioner received a $35,000 distribution in 1993 and a               
          $8,717.32 distribution in 1994 from her IRA’s, which are                    
          qualified retirement plans under section 4974(c)(4).  Petitioner            
          testified that she withdrew the money from her IRA’s to provide             
          for her own subsistence and that of her family.  This is not one            
          of the exceptions set forth in section 72(t)(2), and petitioner             
          has failed to present evidence that would trigger any of the                






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