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of the debts to First Community Financial Services, in the amount
of $15,503, which were paid off by the proceeds received from the
distribution pursuant to the QDRO. Respondent relies on the
reasoning put forth by this Court in Darby v. Commissioner, 97
T.C. 51 (1991), to support this contention.
Respondent is basically using Ms. Seidel’s arguments relying
on community property principles and beneficial recipient as put
forth in the companion case to this case in Seidel v.
Commissioner, T.C. Memo. 2005-67, to support his argument that
petitioner is responsible for the above portions of the CWSC
401(k) plan distribution to Ms. Seidel.
As previously stated, respondent contends that petitioner
should be liable for one-half of the QDRO distribution: (1) Due
to the community property law of California, or (2) due to the
“beneficial receipt of the proceeds by petitioner.”
Generally, under section 402(a), a distribution from a
qualified retirement plan is taxed to the distributee. Section
402(a) provides in part:
Except as otherwise provided in this section, any
amount actually distributed to any distributee by any
employees’ trust described in section 401(a) which is exempt
from tax under section 501(a) shall be taxable to the
distributee, in the taxable year of the distributee in which
distributed, under section 72 (relating to annuities).
Under section 402(a), the general rule is that a distribution
from an exempt employees’ trust (under a tax-qualified employees’
plan) is taxed to the “distributee” under section 72, which
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Last modified: May 25, 2011