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be entered is not reviewable by any other court, and this opinion
should not be cited as authority.
Respondent determined a deficiency in petitioners’ Federal
income tax for the taxable year 2001 of $7,052 and an accuracy-
related penalty under section 6662(a) of $1,410.
After concessions, the issues for decision are:2 (1)
Whether a distribution received by petitioner Julie J. Filer as
the successor owner of her deceased mother-in-law’s annuity
contract is includable in petitioners’ gross income. We hold
that it is to the extent provided herein. (2) Whether
petitioners are liable under section 6662(a) for an accuracy-
related penalty for substantial understatement of income tax. We
hold that they are not.
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 Orangevale, California. (References to petitioners
individually are to Mark or Julie.)
2 Petitioners concede: (1) They received unreported
interest income of $28, and (2) they are not entitled to an IRA
deduction. Respondent concedes that petitioners are not liable
under sec. 72(t) for the additional tax on an early distribution
from a qualified retirement plan.
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