Charlotte and Charles T. Gee - Page 1

                                   127 T.C. No. 1                                     

                               UNITED STATES TAX COURT                                

                    CHARLOTTE AND CHARLES T. GEE, Petitioners v.                      
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 8755-05.              Filed July 24, 2006.                  

                    P rolled over a distribution from her deceased                    
               husband’s individual retirement account (IRA) into her                 
               separate IRA upon her husband’s death.  Four years                     
               later, P received a distribution from her IRA.  She                    
               claims that the distribution was an amount received                    
               from her deceased husband’s IRA and therefore exempt                   
               from the 10-percent additional tax on early                            
               distributions under sec. 72(t)(2)(A)(ii), I.R.C., as a                 
               distribution to a beneficiary upon a decedent’s death.                 
                    1.  Held:  P received an early distribution from                  
               her own IRA subject to the sec. 72(t), I.R.C.,                         
               additional tax.  The amount received from P’s deceased                 
               husband’s IRA lost its character as a distribution made                
               to a beneficiary upon a decedent’s death once P                        
               transferred the funds to her separately owned IRA.                     
                    2.  Held, further, Ps are not liable for the                      
               accuracy-related penalty under sec. 6662(a), I.R.C.                    

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