Thomas Richard White and Donna Estes White - Page 3

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          be entered is not reviewable by any other court, and this opinion           
          should not be cited as authority.                                           
               Respondent determined a deficiency in petitioners’ Federal             
          income tax for the taxable year 2001 in the amount of $1,671.               
               After a concession by petitioners,2 the issues for decision            
          are as follows:                                                             
               (1)  Whether the unpaid balance on a loan obtained by                  
          petitioner Thomas Richard White (Mr. White) from his 401(k) plan            
          constitutes a taxable distribution under section 72(p).  We hold            
          that it does.                                                               
               (2)  Whether petitioners are liable for the 10-percent                 
          additional tax under section 72(t) by virtue of such                        
          distribution.  We hold that they are.                                       
                                     Background                                       
               Some of the facts have been stipulated, and they are so                
          found.                                                                      
               At the time that the petition was filed, petitioners resided           
          in St. Joseph, Tennessee.                                                   
               For a number of years, Mr. White was employed by Graphic               
          Packaging Corp. of Lawrenceburg, Tennessee (Graphic Packaging).             
          As an employee of Graphic Packaging, Mr. White maintained a                 
          401(k) account, which was administered by Fidelity Investments.             


               2  Petitioners concede that they neglected to report                   
          interest income in the amount of $36 that they received from                
          Employee Resources Credit Union.                                            




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