Debra Sue Tussey - Page 3

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               Respondent determined a deficiency in petitioner's Federal             
          income tax of $3,036 for 1999.  Petitioner failed to address in             
          the petition or at trial the adjustment for unreported interest             
          income of $15, and the issue is therefore conceded.  Rule                   
          34(b)(4).  The parties agree that petitioner is entitled to a               
          child tax credit of $500 and a Hope Scholarship Credit of                   
          $1,237.50.  The issues remaining for decision are:  (1) Whether             
          the entire amount of a distribution from petitioner's Individual            
          Retirement Account (IRA) should be included in income; (2)                  
          whether petitioner is liable for the 10-percent additional tax on           
          an early distribution from a qualified retirement plan; and (3)             
          whether the Internal Revenue Service (IRS) misled petitioner, and           
          if so, what is the effect of the action on this case.                       
               The stipulated facts and exhibits received into evidence are           
          incorporated herein by reference.  At the time the petition in              
          this case was filed, petitioner resided in Stillwater, Oklahoma.            
               In May of 1999 petitioner graduated from nursing school.               
          Petitioner had an IRA with New York Life Insurance and Annuity              
          Corporation (NY Life).  Her IRA was a qualified retirement plan             
          under section 4974(c).  During 1999, when petitioner was not yet            
          59-1/2 years old, she received a $15,347 lump-sum distribution              
          from her IRA.  She used at least $10,000 of the distribution to             
          buy her first house.                                                        

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