Gregory Scott West - Page 6

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          (not less frequently than annually) made for the life (or life              
          expectancy) of the employee or joint lives (or joint life                   
          expectancies) of such employee and his designated beneficiary;              
          (5) made to an employee after separation from service after                 
          attainment of age 55;2 or (6) dividends paid with respect to                
          stock of a corporation which are described in section 404(k).  A            
          limited exclusion is also available for distributions made to an            
          employee for medical care expenses.  Sec. 72(t)(2)(B).                      
               The parties do not dispute that petitioner’s IRA was a                 
          qualified retirement plan and that petitioner did not “roll over”           
          his IRA distribution pursuant to section 408(d)(3).  Therefore,             
          in order to prevail, petitioner must fall under one of the                  
          exclusions under section 72(t)(2).                                          
               At issue here is the exception pertaining to distributions             
          attributable to an employee’s being disabled within the meaning             
          of section 72(m)(7).  Sec. 72(t)(2)(A)(iii).  Accordingly,                  
          petitioner is not liable for the 10-percent additional tax for              
          early withdrawal if he was “disabled” during 1997.                          
               Section 72(m)(7) defines the term “disabled” as follows:               
                    For purposes of this section, an individual                       
                    shall be considered to be disabled if he is                       
                    unable to engage in any substantial gainful                       
                    activity by reason of any medically                               
                    determinable physical or mental impairment                        
                    which can be expected to result in death or                       

               2    This provision, codified at sec. 72(t)(2)(A)(v), is not           
          applicable to premature IRA distributions.  Sec. 72(t)(3)(A).               

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Last modified: May 25, 2011