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Respondent determined a deficiency of $3,359 in petitioners’
Federal income tax for 2001. The sole issue for decision is
whether petitioners are liable under section 72(t) for the 10-
percent additional tax on an early distribution from a qualified
retirement plan.
Background
Some of the facts have been stipulated, and they are so
found. The stipulation of facts and the attached exhibits are
incorporated by this reference. Petitioners resided in Sierra
Vista, Arizona, at the time the petition was filed.
Petitioners, Victor A. and Esther Suarez, are husband and
wife. During the year in issue (2001), they were homeowners of
property at 4934 Raffaele Drive, in Sierra Vista, Arizona. In
2001, Victor A. Suarez (hereinafter petitioner) withdrew $33,5901
from his Individual Retirement Account (IRA). He received the
IRA distribution from National Financial Services, LLC. The
funds from the IRA were used for a downpayment and the rebuilding
costs of a house petitioners purchased from the Department of
Veterans Affairs in 2001.
Petitioners timely filed a Form 1040, U.S. Individual Income
Tax Return, for 2001. On their 2001 return, petitioners included
in gross income a distribution from petitioner’s IRA account in
1 On petitioners’ Federal income tax return for 2001 the
amount of distribution from the IRA was listed as $33,590.54.
The stipulation of facts rounded the amount down to $33,590.
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