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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