James Dirks - Page 3

                                         -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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