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transferred to Pershing, which was after the notice of deficiency
was issued, he contacted S.K. and had the certificate sent to
him. Petitioner then delivered the stock to Pershing, and the
stock was accepted by Pershing and placed in petitioner’s IRA
account.
For petitioner’s 1998 Federal income tax year, Pershing
issued petitioner a Form 1099-R, indicating that a $40,000
distribution had been made to petitioner. Petitioner did not
report this $40,000 transaction on his 1998 Federal income tax
return.
Respondent determined that the check issued by Pershing on
September 14, 1998, constituted a distribution from the IRA to
petitioner and was includable in income under sections 408(d) and
72. Respondent also imposed the section 72(t) 10-percent
additional tax.
Discussion
Section 408(d)(1) provides that “any amount paid or
distributed out of an individual retirement plan shall be
included in gross income by the * * * distributee * * * in the
manner provided under section 72.” Respondent argues that
petitioner’s completion of the distribution request form and the
resulting issuance of the $40,000 check constituted a
distribution to petitioner under section 408(d)(1).
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Last modified: May 25, 2011