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(A) General rule.-–If-–
(i) any portion of the balance to the credit of an
employee in a qualified trust is paid to him,
(ii) the employee transfers any portion of the
property he receives in such distribution to an
eligible retirement plan, and
(iii) in the case of a distribution of property
other than money, the amount so transferred consists of
the property distributed,
then such distribution (to the extent so transferred) shall
not be includible in gross income for the taxable year in
which paid.
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(C) Transfer must be made within 60 days of receipt.-–
Subparagraph (A) shall not apply to any transfer of a
distribution made after the 60th day following the day on
which the employee received the property distributed.
The distribution from the retirement plan was received by
petitioner on or about October 19, 1998. Petitioner did not
deposit the funds into an IRA, rather the funds were deposited
into a CMA. Accordingly, the exemption of the distribution from
gross income contained in section 402(a)(5)(A) does not apply.
Petitioner’s argument seems based on an overly expansive
reading of our opinion in Wood v. Commissioner, 93 T.C. 114
(1989). Wood involved a distribution from a profit-sharing plan
where the taxpayer established an IRA within the 60-day period
and transferred the distribution to a trustee. Because of a
bookkeeping error by the trustee of the IRA, a portion of the
distribution was not credited to the IRA account within the 60-
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Last modified: May 25, 2011