Richard S. and Mary L. Garcia - Page 3

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               Respondent determined a deficiency of $5,607 in Federal                
          income tax and the 10-percent additional tax under section 72(t)            
          for an early distribution from a qualified retirement plan with             
          respect to petitioners' 1997 tax year.  After concessions by the            
          parties, the sole issue for decision is whether, under section              
          6402, respondent properly credited a payment by petitioners to              
          their 1996 tax year instead of 1997 as contended by petitioners.2           
               Some of the facts were stipulated.  Those facts, with the              
          exhibits annexed thereto, are so found and are made part hereof.            
          Petitioners' legal residence at the time the petition was filed             
          was Irving, Texas.                                                          
               Petitioners' 1997 joint income tax return reflected total              
          tax payments of $7,500, a tax liability of $3,009, and an                   
          overpayment of $4,491.  At trial, respondent conceded that                  
          petitioners had made one additional payment of $582 on their 1997           

               2    Respondent conceded an unreported interest income                 
          adjustment of $211, an unreported pension and annuity income                
          adjustment of $97.44, and the 10-percent additional tax under               
          sec. 72(t).  Respondent also conceded petitioners' entitlement to           
          a trade or business expense deduction of $627 attributable to a             
          self-employed activity of Mrs. Garcia.  Petitioners conceded                
          their liability for self-employment taxes on the net income from            
          Mrs. Garcia's trade or business activity, and respondent conceded           
          petitioners' entitlement to a deduction for one-half of the self-           
          employment tax under sec. 164(f).  Petitioners further conceded             
          that the Social Security benefits paid to Mr. Garcia during 1997            
          totaled $11,385 instead of $10,740 reported on their return.                
          Finally, respondent conceded petitioners' entitlement to an                 
          additional dependency exemption for their daughter, which they              
          had not claimed on their return.                                            

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