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In the petition to this Court, it is unclear whether
petitioner contended that her distributions were not subject to
the 10-percent additional tax because they were used for medical
expenses under section 72(t)(2)(B). However, petitioner
introduced evidence that would suggest that such a claim might be
relevant; therefore, we shall discuss this contention.
Section 72(t)(2)(B) provides that the following
distributions are not subject to the additional tax:
(B) Medical Expenses.--Distributions made to the
employee * * * to the extent such distributions do not
exceed the amount allowable as a deduction under
section 213 to the employee for amounts paid during the
taxable year for medical care (determined without
regard to whether the employee itemizes deductions for
such taxable year).
The deduction allowed under section 213(a) is for “the expenses
paid during the taxable year, * * * for medical care * * * to the
extent that such expenses exceed 7.5 percent of adjusted gross
income.”
On petitioner’s Schedule A, Itemized Deductions,4 petitioner
calculated that the total medical and dental expenses paid by her
and her husband in 2000 was $3,365. Petitioner’s 2000 Federal
income tax return reflects that her and her husband’s joint
adjusted gross income was $54,340. Therefore, 7.5 percent of
4Petitioner decided against itemizing her deductions and
instead used the standard deduction in her 2000 joint Federal
income tax return. However, petitioner introduced her Schedule
A, Itemized Deductions, into evidence in this case.
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