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stated that “(Use of this form will result in a distribution
reportable to the IRS [Internal Revenue Service] on Form 1099-R
[Distributions From Pensions, Annuities, Retirement or Profit-
Sharing Plans, IRAs, Insurance Contracts, etc.]).”
On September 14, 1998, petitioner executed the form
requesting Pershing to issue a $40,000 check made payable to S.K.
and instructed that the check constituted an investment of his
IRA assets. Pershing sent petitioner a confirmation letter
indicating that a distribution of $40,000 had occurred on
September 15, 1998, and instructed petitioner to contact Pershing
if he had any questions. On the same day, Pershing issued the
$40,000 check payable to S.K. drawn on petitioner’s IRA account.
Pershing sent the check to petitioner. Petitioner did not
negotiate the check. Instead, petitioner forwarded the check
directly to S.K.
A “Memorandum of Corporate Stock Purchase” maintained by
S.K. reflected that, on October 29, 1998, petitioner’s IRA
purchased 714.28 shares of stock for $40,000. On December 1,
1998, S.K. issued stock certificate No. 3. The certificate
stated that “IRA fbo ROBERT ANCIRA, M.D. DLJSC. is the owner” of
714.28 shares. For reasons that are not clear, the stock was not
immediately transferred to Pershing or to petitioner. Petitioner
was unaware that Pershing did not have the stock until much
later. When petitioner learned that the stock had not been
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Last modified: May 25, 2011