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that the funds in question had an average rate of return of 23.01
percent rather than the 34.65 percent claimed by petitioner.
Petitioner admitted at trial to having made the
computational errors claimed by respondent in calculating the
average rates of return. However, he argued that he did not
intend for the money in his IRA accounts to remain invested in
those seven funds indefinitely. Rather, he intended to maintain
investments in funds that were performing to his satisfaction.
He stated: “I don’t leave the money in the same mutual fund all
the time. I move it to whoever is doing the best job at any
given time. Money is portable. So I can take it out of fund A
and put it in fund B.” He further explained: ”the idea is to
stay on top of the situation enough so you move your money to the
funds that are performing.” Petitioner also admitted that the
funds he selected in 1995 did not all continue to earn a rate of
return higher than 29 percent. However, he argued that such a
rate was still sustainable and gave current examples of high
performance funds. At trial, petitioner was invested in only one
of the original seven funds considered in calculating the
periodic withdrawal amount. He attributed this to having
followed the approach of moving money around when necessary to
maximize his rate of return to try to attain the growth-rate
percentage used in calculating the amount of allowable
distribution that could be made each year.
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Last modified: May 25, 2011