- 7 - contributions to the extent the contributions are considered an “investment in the contract”. Secs. 72(e), 408(d); Alpern v. Commissioner, T.C. Memo. 2000-246. Nondeductible contributions to an IRA minus any prior withdrawals or distributions of nondeductible contributions constitutes a taxpayer’s investment in the contract. Sec. 72(e); Campbell v. Commissioner, 108 T.C. 54, 61-62 (1997). Nondeductible contributions, however, must be designated as such and reported on Form 8606, Nondeductible IRA Contributions, IRA Basis, and Nontaxable IRA Distributions, in the manner prescribed by the Internal Revenue Code. Sec. 408(o)(4); Alpern v. Commissioner, supra. Petitioner admitted that he lacked a complete paper trail for his IRAs. Petitioner relies on his own testimony to establish that a portion of the IRA distributions in 2001 was not taxable. Petitioner claimed that in 1994 Mellon Bank inappropriately “converted” an account he held there from a regular account to an IRA account, and it was these funds that he eventually transferred to the Strong IRA. We found petitioner’s testimony to be general, vague, conclusory, and/or questionable in certain material respects. Petitioner’s testimony was contradictory as to when he opened this alleged non-IRA account at Mellon Bank (1980, the late 1980s, or 1993) and as to what kind of alleged non-IRA account it was (a savings account, a CD, or a “timedPage: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011