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FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
Petitioners are husband and wife. They filed a timely joint
Federal income tax return for 1996. At the time the petition was
filed, petitioners resided in Danville, California. References
to petitioner are to Jaime Pena.
Petitioner is an attorney licensed to practice in
California. Prior to the year in issue, he was employed as an
attorney by Jaime Pena Professional Corp. (the corporation).
Effective as of September 1, 1982, for petitioner’s benefit and
with petitioner as trustee, the corporation established a defined
benefit single-employer plan entitled the Jaime Pena A P.C.
Defined Benefit Plan (the plan). The plan was a qualified
pension plan within the meaning of section 401(a).1
Over the years, the corporation made contributions to the
plan on petitioner’s behalf and claimed deductions for those
contributions on its corporate Federal income tax returns. None
of the contributions were includable, or were included in
petitioners’ income for any period. Petitioner never made any
contributions to the plan.
The plan maintained a brokerage account with Kidder, Peabody
& Company (the Kidder account), but investment decisions were
1 Section references are to the Internal Revenue Code, as
amended, in effect during the relevant period.
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