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redesignated the IRA as her own. She did not need to
“redesignate” the IRA. The IRA was her previously existing
account. We therefore find no merit to petitioner’s argument
that the rolled over funds retain their character because she did
not redesignate her IRA.
Petitioner rolled over the entire amount received from her
deceased husband’s IRA into her own IRA. Petitioner is and was
the sole owner of her separately created IRA. The distribution
petitioner received was not occasioned by the death of her
deceased husband nor made to her in her capacity as beneficiary
of his IRA.
Petitioner cannot have it both ways. She cannot choose to
roll the funds over into her own IRA and then later withdraw
funds from her IRA without additional tax liability because the
funds were originally from her deceased husband’s IRA.
Accordingly, once petitioner chose to roll the funds over into
her own IRA, she lost the ability to qualify for the exception
from the 10-percent additional tax on early distributions. The
funds became petitioner’s own and were no longer from her
deceased husband’s IRA once petitioner rolled them over into her
own IRA. The funds therefore no longer qualify for the
exception.
The section 72(t) tax discourages premature IRA
distributions that frustrate the intention of saving for
retirement. Dwyer v. Commissioner, 106 T.C. 337, 340 (1996); see
also S. Rept. 93-383, at 134 (1974), 1974-3 C.B. (Supp.) 80, 213.
To avoid the section 72(t) additional tax, petitioner must show
that the IRA distribution falls within one of the exceptions
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