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B. Distribution of $7,089.95
As indicated, petitioner received a Form 1099-R from Merrill
Lynch for tax year 2001 indicating a $7,089.95 distribution from
a CIG-sponsored retirement plan. The designation code, “L,”
indicated a loan from a retirement plan. Petitioner does not
argue that the payment is not a loan or that it should not be
included on his return in gross income. Petitioner argues that
the balance of the loan as reflected in statements from Merrill
Lynch is incorrect.
There is nothing in this record that would establish that
the payment did not give rise to a deemed distribution.
Petitioner’s argument that the loan balance reflected by the
employer or plan administrator incorrectly states the balance due
on the loan is not relevant to the issue of the taxability of the
payment. Nor has petitioner established that he comes within any
of the exceptions relating to deemed distributions. See sec.
72(p)(2)(A). Respondent’s determination that the $7,089.95 is
includable in petitioner’s gross income for 2001 is sustained.
IV. Additional 10-Percent Tax for Early Withdrawal
Section 72(t)(1) imposes an additional tax on an early
distribution from a qualified retirement plan equal to 10 percent
of the portion of the amount which is includable in gross income.
The 10-percent additional tax does not apply to certain
distributions: (1) To an employee age 59-1/2 or older; (2) to a
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