Jack A. and Theresa Y. Smith - Page 4

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          entity.”  Respondent contends that the $76,087 is a distribution            
          subject to the section 72(t) additional tax.                                
               Section 72(t) imposes a 10-percent additional tax on early             
          distributions from qualified retirement plans, unless an                    
          exception applies.  Section 72(t)(2)(A)(iv) is the only relevant            
          exception here.                                                             
               Section 72(t)(2)(A)(iv) provides that the 10-percent                   
          additional tax shall not apply to distributions which are “part             
          of a series of substantially equal periodic payments (not less              
          frequently than annually) made for the life (or life expectancy)            
          of the employee or the joint lives (or joint life expectancies)             
          of such employee and his designated beneficiary”.                           
               Petitioners contend that “The lump sum distribution received           
          by Petitioner was part of a series of substantially equal                   
          periodic payments based upon his life expectancy that were                  
          accumulated monthly from July 1, 1991 to July 1, 1994.”                     
          Unfortunately, petitioners focus on the contributions made to the           
          pension plan, not on the payments made from the plan.                       
               We find that the lump-sum distribution does not satisfy the            
          requirements of the exception under section 72(t)(2)(A)(iv).  The           
          lump-sum distribution was a one-time payment.  The lump-sum                 
          distribution was not part of a series of substantially equal                
          periodic payments made not less frequently than annually.  On               
          this record, we conclude that the lump-sum distribution is                  

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