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in 2003 and 2004 should be used to reduce the amount of the
distribution subject to the 10-percent additional tax in 2002.
Under the express language of the statute, the qualified
higher education expenses must be incurred by the taxpayer in the
taxable year of the distribution. Sec. 72(t)(2)(E); Beckert v.
Commissioner, T.C. Memo. 2005-162. We have found no exception to
this requirement. Accordingly, petitioner’s higher education
expenses incurred in 2003 and 2004 cannot be applied to reduce
the amount of the distribution in 2002 subject to the 10-percent
additional tax.
To reflect the foregoing,
Decision will be entered
for respondent.
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Last modified: May 25, 2011