- 5 -
first home purchase exception in section 72(t)(2)(F).
Alternatively, petitioner contends that he had a basis in the
amount distributed from his TESPHE account equal to the amount of
his previous loan principal repayments and, therefore, that he is
subject to the 10-percent additional tax only to the extent his
1999 TESPHE distribution exceeded his basis.3
Discussion4
Generally, section 72(t)(1) imposes an additional tax on
early distributions from qualified retirement plans “equal to 10
percent of the portion of such amount which is includible in
gross income.”5 The section 72(t) additional tax does not apply
to certain distributions. For example, distributions that are
made on or after the date on which the taxpayer attains the age
of 59� are not “early” and therefore not subject to the
additional tax. Sec. 72(t)(2)(A)(i).
3 Petitioner contends that if he is subject to the 10-
percent additional tax, then he is subject to the additional tax
only on $10,774 (the $50,674 distribution less the $39,900 total
loan proceeds) as opposed to $50,674.
4 We decide the issue in this case without regard to the
burden of proof. See sec. 7491; Rule 142(a); Higbee v.
Commissioner, 116 T.C. 438 (2001).
5 As relevant to the present case, a “qualified retirement
plan” includes a qualified pension or profit sharing plan under
sec. 401(a). Sec. 4974(c)(1).
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011