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distribution, leaving only the deduction authorized by section
402(d)(3).
Respondent, on the other hand, contends that petitioner must
include the entire amount of the 1998 distribution in his gross
income. Respondent also contends that petitioner and Mrs.
Barkley are not eligible to claim the benefit of forward
averaging under section 402(d) because petitioner did not elect
the application of section 402(d) and because neither petitioner
nor Mrs. Barkley had attained the age of 59� when petitioner
received the 1998 distribution. Respondent further contends that
section 402(d) does not allow a deduction unless the amount
deducted is also included in gross income and is subject to the
separate tax imposed by section 402(d)(1) and that, because Mrs.
Barkley is not a “distributee”, she is not liable for any tax on
the distribution.
The parties’ arguments are difficult to understand, given
petitioner’s admissions that the entire 1998 distribution is
includable in income on his 1998 joint Federal income tax return
and that section 402(d) does not apply to his share of the 1998
distribution. Even if we assume, for the sake of discussion,
that Mrs. Barkley had a community property interest in the 1998
distribution as petitioner contends, the entire 1998 distribution
must still be included in the income reported on the 1998 joint
return. As we understand petitioner’s arguments, what he is
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