3
Booth could remodel her home.2 Petitioner does not have a record
of where the funds were transferred upon withdrawal.
Petitioner did not roll over the IRA amounts into another
qualified employee retirement plan or individual retirement plan.
He received two Forms 1099-R, Distributions From Pensions,
Annuities, Retirement or Profit-Sharing Plans, IRA’s, Insurance
Contracts, Etc., for the year 1996 reflecting the withdrawals
from the IRA’s. The amounts withdrawn were reported on
petitioner’s and Ms. Booth’s joint Federal income tax return.
Although the amount of the distribution was reported on the
return, the 10-percent penalty for early withdrawal was not
reported. Petitioner, who was born on November 15, 1956, was 40
years of age in 1996 when the withdrawals were made.
In a notice of deficiency, respondent determined a
deficiency in the amount of $1,997. This amount represented a
10-percent additional tax on IRA distributions pursuant to
section 72.
Under section 408(d)(1), a distribution from an IRA is
taxable to the distributee in the year of distribution in the
manner provided under section 72. Section 408(d)(3) provides an
exception to the general rule for certain “rollovers” by the
2 The family home was Ms. Booth’s separate property
before marriage. Upon marriage, petitioner became a joint owner
of the home, and then upon divorce the home was awarded to Ms.
Booth.
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Last modified: May 25, 2011