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covered only herself. However, in 2000, petitioner extended her
COBRA coverage to include her husband, which resulted in her
premiums increasing to $772 per month. Petitioner was notified
in 2001 that such coverage was canceled retroactively to November
2000 due to unpaid premiums. Petitioner would eventually file
for bankruptcy in 2001.
During 2000, the year in issue, petitioner withdrew
$1,168.39 from her Vanguard 401(k) qualified retirement plan and
$10,000 from her Gruntal IRA. Petitioner did not roll over the
distributed amounts into another qualified employee retirement
plan or individual retirement plan. Petitioner reported the
$11,168.39 combined amount withdrawn on her 2000 Federal income
tax return. Although the amount of the distributions was
reported on the return, petitioner did not compute the 10-percent
additional tax due for the early withdrawals. Petitioner, who
was born in 1948, was 52 years of age in 2000 when the
distributions were made.
Petitioner filed a joint Federal income tax return with her
then-husband, Robert J. Scott, for the taxable year 2000.
Between January and July 2000, Mr. Scott was a salesman with the
Pittsburgh Post Gazette. In July, he moved to San Francisco,
California, to live with petitioner and began work with the San
Francisco Chronicle, where he remained employed until November
when he left for Florida.
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