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The record is clear that Mr. El-Bibany did not receive any
Federal or State unemployment compensation at any relevant time.
See sec. 72(t)(2)(D)(i)(I). Mr. El-Bibany, however, testified
that he worked in “some nonemployment activities” related to
high-tech investments in 2000. Mr. El-Bibany’s testimony raises
the question whether he was self-employed. See sec.
72(t)(2)(D)(iii). Assuming arguendo that he was self-employed,
there was no evidence to suggest that Mr. El-Bibany continued to
work in such “nonemployment activities” in 2001. Indeed, Mr. El-
Bibany was employed for only 2 weeks during 2001 in the United
Arab Emirates. Moreover, Mr. El-Bibany presented no evidence
that he would have been eligible to receive any Federal or State
unemployment compensation. By his own testimony, Mr. El-Bibany
applied for unemployment compensation, but he was not eligible
because he had not worked for a specified period in California.
In view of the foregoing, we conclude that petitioner does
not satisfy the requirements under section 72(t)(2)(D).
Accordingly, we sustain respondent’s determination on this issue.
B. Qualified Higher Education Expenses
Qualified higher education expenses for purposes of section
72(t)(2)(E) are defined by section 529(e)(3).8 Sec. 72(t)(7)(A).
Section 529(e)(3)(A) defines qualified higher education expenses
8 Sec. 529 sets forth criteria for higher education
entities to be exempt from taxation as a qualified tuition
program.
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