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Respondent determined a deficiency of $2,500 in petitioners’
2001 Federal income tax that was based solely on the failure to
pay the 10-percent additional tax on an early distribution of
$25,000 from an individual retirement account (IRA). After
respondent’s concession that $7,017.01 of the distribution was
used to pay qualified higher education expenses in the taxable
year 2001, the issue is whether petitioners are subject to the
10-percent additional tax under section 72(t)(1) on the remaining
$17,982.99. Petitioners resided in Liberty Township, Ohio, at
the time the petition was filed.
Background
Petitioners received an early distribution of $25,000 from
an IRA in 2001.2 Petitioners were both younger than 59-1/2 at
the time of the withdrawal. Petitioners reported the $25,000 as
income on line 15b of their jointly filed 2001 Form 1040, U.S.
Individual Income Tax Return, which was filed on August 14,
2002.3 Petitioners’ daughter Kathleen enrolled in classes at
Miami University in Oxford, Ohio, in August, 2001.
Respondent determined a deficiency of $2,500 for the taxable
year 2001 based solely on petitioners’ failure to pay the 10-
2 The record does not contain the exact date in 2001 of
the distribution.
3 This appears to be a timely filed return, though the
record does not specifically contain information regarding
extension requests.
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Last modified: May 25, 2011