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proceeds of the distribution were used to purchase a home as a
first-time homeowner under section 72(t)(8).
During 1999, petitioner was employed by several employers
doing electrical maintenance work. Petitioner married on July 1,
1999, and he and his spouse purchased a home in August 1999,
which they moved into. Sometime in December 1999, petitioner and
his spouse separated; however, petitioner continued living in the
house. Petitioner had previously been married but was divorced
in 1990. During the first marriage, petitioner served in the
United States military, and he and his spouse never purchased a
home. His testimony is that the home purchased in August 1999
was the first home he had ever purchased, and that the proceeds
of the two distributions in question were applied to the $54,000
purchase price for the home. Respondent presented no evidence to
discredit petitioner's testimony, nor did respondent present any
other evidence to establish that the August 1999 home purchase
was not petitioner's first home purchase, or that the individual
retirement accounts proceeds in question were not applied to the
purchase price of the home.
Section 72(t)(1) imposes a 10-percent additional tax on
early distributions from qualified retirement plans. There are
several situations, however, in which the additional tax does not
apply. Pertinent to this case is section 72(t)(2)(F), which
provides generally that the additional tax does not apply to
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Last modified: May 25, 2011