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Pennsylvania, since high school. Mrs. Olup has not been employed
since 1998.
Petitioners were married on June 9, 2001. After their
marriage, Mrs. Olup moved into the townhouse with Mr. Olup. In
2002, petitioners began looking for a primary marital residence
closer to Mrs. Olup’s family.
On June 13, 2002, petitioners purchased a lot at 231
Galbreath Drive, Monongahela, Pennsylvania 15063 (Galbreath
home), and began construction of a single family residence.
Petitioners were listed as joint owners on the property’s title
as well as on the mortgage. The Galbreath home was Mrs. Olup’s
first ownership interest in real estate. Petitioners moved into
the Galbreath home in April 2003. Since then, petitioners have
maintained the Galbreath home as their first marital residence.
In 2002, Mr. Olup withdrew $20,617 from his IRA. He
received the IRA distribution from Janus Mutual Funds. The
distribution proceeds were used to pay the acquisition costs for
the Galbreath home.
Petitioners timely filed a Form 1040, U.S. Individual Income
Tax Return, for 2002. On line 15b of their return, petitioners
reported the $20,617 distribution from Mr. Olup’s IRA as taxable
income. Petitioners attached to their return, inter alia, Form
5329, Additional Taxes on Qualified Plans (Including IRAs) and
Other Tax-Favored Accounts. On the Form 5329, petitioners
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Last modified: May 25, 2011