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IRA Distribution From Mr. Spuler
Generally, any amount paid or distributed to a taxpayer from
an IRA is included in gross income in the manner provided by
section 72. See sec. 408(d)(1). A payee will generally not have
a basis in the IRA, unless the payee contributed nondeductible
amounts to the IRA. See secs. 72(e), 219(a) and (b), 408(d)(1)
and (2); Campbell v. Commissioner, 108 T.C. 54 (1997); sec.
1.408-4(a), (c), Income Tax Regs. When a payee contributes
nondeductible amounts, the payee’s gross income does include an
amount of the distribution in proportion to the nondeductible
contribution as compared to the total contribution to the IRA.
See secs. 72(e), 408(d)(1); Campbell v. Commissioner, supra; sec.
1.408-4(c), Income Tax Regs.
The parties agree that petitioner received $10,906 in 1995
from Mr. Spuler’s IRA. Petitioner contends that Mr. Spuler had
basis in the IRA for the following reason:
However, given the history of the contributions as made
subsequent to my father’s retirement from his lifetime
primary employer, Public Service Gas & Electric, it is
reasonable to assume that they were non-deductible
contributions. He was earning minor wages working
part-time during those years, and would not have needed
and or required deductible contributions.
We do not find petitioner’s unsupported self-serving statement to
be sufficient to support the assertion that the IRA included
nondeductible contributions. See Niedringhaus v. Commissioner,
99 T.C. 202, 219-220 (1992); Tokarski v. Commissioner, 87 T.C.
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Last modified: May 25, 2011