-3-
During 2000, petitioner had an IRA (first IRA) at Nicholas
Fund, Inc. He withdrew a total of $118,000 from the first IRA on
January 19 and 21, 2000, in order to purchase the house. He had
previously researched section 408 as it applied to withdrawing
those funds and to paying them into another IRA within 60 days so
as to exclude his withdrawals from his gross income. He
concluded that the 60-day rule required that he pay the $118,000
into another IRA no later than March 20, 2000, in order to
exclude both days’ distributions from his gross income.2
Petitioner used the $118,000 to purchase the house on
February 7, 2000. Shortly thereafter, he contacted a mortgage
broker to finance his purchase through a mortgage loan. He
applied with the mortgage broker for the loan, and the mortgage
broker sent petitioner’s paperwork to a lender for approval. The
lender approved the loan on March 24, 2000, after requesting and
receiving from petitioner additional information. Escrow on the
financing closed on April 3, 2000, and petitioner paid $118,000
of the resulting funds into a second IRA (second IRA) on April 4,
2000.
Nicholas Fund, Inc., issued to petitioner a 2000 Form
1099-R, Distributions from Pensions, Annuities, Retirement or
Profit-Sharing Plans, IRAs, Insurance Contracts, etc. The form
2 Given that 2000 was a leap year, the 60th day after the
first distribution actually fell on Mar. 19, 2000.
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