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Norman’s Dreyfus IRA (Norman’s IRA) “shall be forthwith divided
equally” between petitioner and Norman.
In July of 1999, petitioner opened in her name a Dreyfus
IRA. On the application for her Dreyfus IRA (petitioner’s IRA),
petitioner indicated that her IRA would be funded by a transfer
of $60,000 from Norman’s IRA.
On July 23, 1999, Norman mailed to Dreyfus a letter,
enclosing a copy of the above court order, directing Dreyfus to
transfer $60,000 from his IRA into petitioner’s IRA. In the
letter to Dreyfus, Norman indicated that the request to transfer
the $60,000 was “due to a divorce settlement”, and Norman
attached to the letter petitioner’s application to open her IRA.
On August 4, 1999, Dreyfus transferred the $60,000 from
Norman’s IRA directly into petitioner’s IRA.
Four and a half months later, on December 21, 1999,
petitioner signed a Dreyfus distribution request form, in which
petitioner directed Dreyfus to “liquidate $60,000” from her IRA.
The Dreyfus form stated expressly that --
If you are requesting a distribution from a Traditional
IRA * * *, you acknowledge that your Traditional IRA
* * * will be subject to income tax and, if you are
under age 59-1/2, a 10% penalty tax for premature
distribution * * *.
Petitioner requested Dreyfus not to withhold any income tax from
the distribution.
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