- 16 - liability for the 10-percent penalty. They claim detrimental reliance in that had they known they would owe such tax, petitioner would have paid off the pledge to Georgetown University Law Center in full in 1999, and, in so doing, petitioners could have taken an itemized charitable contribution deduction for the $25,000 gift to Georgetown. Instead, they claimed the standard deduction on their 1999 return and lost the tax benefits of a charitable contribution they could have realized. A more complete reading of the applicable instructions undercuts petitioners’ argument. The instructions clearly state that they apply to rollovers from one qualified plan to another qualified plan.14 Petitioners’ SFB and Glenbrook nonqualified 14 The instructions read, in pertinent part: Rollovers A rollover is a tax-free distribution of cash or other assets from one retirement plan that is contributed to another plan. Use lines 16a and 16b to report a rollover, including a direct rollover, from one qualified employer’s plan to another or to an IRA or SEP. Enter on line 16a the total distribution before income tax or other deductions were withheld. This amount should be shown in box 1 of Form 1099-R. From the total on line 16a, subtract any contributions (usually shown in box 5) that were taxable to you when made. From that result, subtract the amount that was rolled over either directly or within 60 days of receiving the distribution. Enter the remaining amount, even if zero, on line 16b. Also, put “Rollover” next to line 16b. (continued...)Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
Last modified: May 25, 2011