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Respondent determined a deficiency in petitioners’ Federal
income tax for the taxable year 2001 of $4,498. The deficiency
is attributable solely to the 10-percent additional tax under
section 72(t) on an early distribution from a qualified
retirement plan.
After respondent’s concession,2 the issue for decision is
whether petitioners are liable under section 72(t) for the 10-
percent additional tax on an early distribution from petitioner
Hossam Helmy El-Bibany’s (Mr. El-Bibany) retirement plan. We
hold that they are to the extent provided herein.
Background
Some of the facts have been stipulated, and they are so
found. We incorporate by reference the parties’ stipulation of
facts, supplemental stipulation of facts, and accompanying
exhibits.
At the time that the petition was filed, petitioners resided
in Menlo Park, California.
Mr. El-Bibany obtained a Ph.D. from Stanford University in
1992 and joined the faculty at Penn State University in 1993,
until his job ended in 1999. At that time, petitioners had two
small children, and petitioner Salma Hassan Kandil (Mrs. Kandil)
2 Respondent concedes that petitioners are entitled to an
exception from the early distribution penalty under sec.
72(t)(2)(E) of $846 for qualified higher education expenses for
books and supplies.
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