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We conclude that petitioner may not deduct home office expenses
for the Lower Wetumpka Road or Creek Drive houses.
E. The 10 Percent Tax for Early Distributions From a Retirement
Plan
A 10-percent additional tax is imposed on early
distributions from a qualified retirement plan which are
includable in the recipient's gross income unless one of the
exceptions listed in section 72(t)(2) applies. See sec. 72(t)(1)
and (2). In 1995, petitioner received a taxable distribution of
$3,759.27 from Fidelity Investments. He did not attain age 59-
1/2 in 1995. Petitioner contends that he paid the additional tax
with his 1995 return. Petitioner reported the Fidelity
Investments distribution as income on his 1995 return. However,
he did not pay a 10-percent additional tax for that distribution.
Thus, we sustain respondent’s determination that petitioner is
liable for a 10-percent additional tax on the distribution.
F. Addition to Tax for Failure To Timely File Under Section
6651(a)(1)
Respondent determined and contends that petitioner is liable
for the addition to tax under section 6651(a) for failure to
timely file his income tax return for 1994. A taxpayer is liable
for an addition to tax of up to 25 percent for failure to timely
file a Federal income tax return unless the failure was due to
reasonable cause and not willful neglect. See sec. 6651(a)(1).
The addition to tax is imposed on the net amount due. See sec.
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