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deposit (regular CDs). Later, some of his CDs were converted
into or purchased as individual retirement accounts (IRA CDs).
To the extent pertinent to the issues before the Court,
petitioner’s retirement planning transactions are described below
in greater detail.
In 1993, petitioner became a name partner in the law firm of
Oldenettel & Sadberry. His partner was Rick Oldenettel. The law
firm had a qualified section 401(k) retirement plan in which
petitioner participated. The firm accountant was Dan Wendel,
from whom petitioner sought informal personal tax and retirement
advice from time to time during his tenure with the law firm and
thereafter.
During 1996, petitioner purchased a number of annuities. In
May, he purchased a nonqualified annuity from Glenbrook Life and
Annuity with proceeds he received from the settlement of a
lawsuit (Glenbrook nonqualified annuity).4 In June, he purchased
a second nonqualified annuity from Southern Farm Bureau Life
Insurance Co., funded with an initial contribution of
petitioner’s regular CDs (SFB nonqualified annuity).5 In
4 Glenbrook Life and Annuity, Flexible Premium Deferred
Annuity Contract, policy number GA295240. Petitioner did not
elect to include the Glenbrook annuity as a qualified retirement
plan under sec. 401(a) or 4974(c)(1), nor did it qualify as an
annuity plan under secs. 403(a) and 4974(c)(2).
5 Southern Farm Bureau Life Insurance Co., Flexible
(continued...)
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