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claimed that $10,000 of the distribution was excluded from the
additional tax on early distributions under exception No. 1 (IRA
distributions made for purchase of a first home, up to $10,000).
Petitioners then reported on their return $1,061 for the 10-
percent additional tax computed on the remaining distribution of
$10,617.
In the notice of deficiency, respondent determined that
petitioners are liable for the 10-percent additional tax on the
entire distribution under section 72(t) because Mr. Olup is not a
first-time homebuyer.
Petitioners filed a timely petition with the Court.
Paragraph 4 of the petition states in relevant part:
Petitioners filed form 5329 and excepted $10,000 from
the “additional tax” due to construction of our home.
Petitioners argument is that the distributions were
used in the acquisition of a principal residence and
that the distributions were qualified first-time
homebuyer distributions within the intent and meaning
of section 72(t)(8).
Discussion3
Generally, a distribution from an IRA is includable in the
distributee’s gross income in the year of distribution under the
provisions of section 72. Secs. 61(a)(9), 408(d)(1), (3); see
secs. 408(a), 4974(c)(4). Such distributions made prior to a
3 We decide the issue in this case without regard to the
burden of proof because the facts are not in dispute and the
issue is legal in nature. See generally sec. 7491(a); Rule
142(a); Higbee v. Commissioner, 116 T.C. 438 (2001).
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