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Respondent determined a deficiency in petitioner’s Federal
income tax for the taxable year 1998 in the amount of $20,319,
and an accuracy-related penalty under section 6662(a) in the
amount of $4,064.
The issues for decision are (1) whether a distribution
received by petitioner in 1998 from his deceased brother’s
profit-sharing plan is includable in petitioner’s gross income,
and (2) whether petitioner is liable for an accuracy-related
penalty for substantial understatement of income under section
6662(a).
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time the petition
was filed, petitioner resided in Jersey City, New Jersey.
Petitioner’s brother, Martin Timmerman (Martin), died
intestate on March 23, 1997. On October 10, 1997, petitioner was
appointed Letters of Administration from the Surrogate’s Court of
Hudson County, New Jersey, to administer and settle Martin’s
estate.
Prior to his death, Martin worked for JP Morgan and held a
deferred interest in a profit-sharing plan (plan). In a letter
dated April 9, 1997, from Gary D. Naylor, Vice President of JP
Morgan, petitioner was notified of the monetary balance in the
plan and that he was the sole beneficiary of Martin’s plan.
Attached to the letter were an explanation of payment options
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