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of Deposit Special in his name and caused Mrs. Anderson to
purchase from Arlington a 1-year, $100,000 Certificate of Deposit
Special in her name. Although a box appeared on the applications
to create a trust account, neither of the applications for the
purchases nor the actual certificates of deposit mention the
creation of a trust account or an IRA. Neither petitioner ever
opened a trust account or an IRA account of Arlington, and none
of the $200,688.97 was ever rolled over into a trust account or
an IRA account.
NFSC issued to Mr. Anderson a Form 1099-R, Distributions
from Pensions, Annuities, Retirement or Profit-Sharing Plans,
IRAs, Insurance Contracts, Etc., reporting a gross taxable
distribution of $205,298. On petitioners’ 1997 tax return, they
reported a total IRA distribution of $205,298 but that only
$5,298 was taxable. On July 21, 2000, respondent mailed to
petitioners a notice of deficiency for the tax on the remaining
$200,000 of the distribution.
OPINION
We must decide whether petitioners are taxable in 1997 on
their receipt of the remaining $200,000 of IRA funds.4
4 Our decision does not depend on which party has the burden
of proof. We note in passing, however, that petitioners do not
argue that sec. 7491(a) places the burden of proof on the
Commissioner here. We also note that Mr. Anderson was of a
permissible age to receive the distribution without a tax. Sec.
72(t). Thus, respondent did not determine that Mr. Anderson was
subject to the 10-percent tax for early distribution.
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