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would have been allowable to petitioner for a tax deduction under
section 213. Sec. 162(l)(3). Therefore, the section 72(t) 10-
percent additional tax on petitioner’s early distributions from
her annuity accounts will not apply to the extent that
petitioner’s $1,809 in medical expenses and the $1,284 balance in
petitioner’s health insurance premiums not already deducted under
section 162(l) would potentially be allowable to petitioner as a
deduction under section 213; namely, to the extent of $3,093.
A further limitation however, under section 213 must also be
considered. Medical expenses and health insurance premiums are
allowable as a deduction from income under section 213 only to
the extent that they exceed a floor of 7.5 percent of an
individual’s adjusted gross income. See sec. 213(a).
Applying to petitioner the above section 213(a) 7.5-percent
floor, petitioner herein is permitted to except only $267 from
application of the section 72(t)(2)(B) 10-percent additional
tax.2 On brief, respondent already has allowed petitioner to
reduce the amount of her early annuity account distributions to
which the section 72(t) 10-percent additional tax is applicable
by this $267.
2 Petitioner’s taxable income of $37,685 times 7.5 equals a
floor of $2,826; petitioner’s adjusted total medical expenses and
health insurance premiums of $3,093 less the $2,826 floor equals
$267.
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Last modified: May 25, 2011