Susan F. Mostafa - Page 4

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          Court.  Upon order of this Court, petitioner filed an amended               
          petition on September 3, 2004, contesting respondent’s                      
               Gross income means all income from whatever source derived,            
          including income from compensation for services.  Sec. 61(a)(1).            
          Petitioner admitted receiving wage income of $1,076 from the                
          public school district.  Therefore, we find petitioner must                 
          include $1,076 in her gross income, as determined by respondent.            
               Generally, distributions from an IRA are includable in the             
          distributee’s gross income as provided in section 72.  Sec.                 
          408(d)(1); Lemishow v. Commissioner, 110 T.C. 110, 112 (1998).              
          However, “rollover contributions” are not includable in gross               
          income.  Sec. 408(d)(3); Lemishow v. Commissioner, supra at 112.            
          To qualify as a rollover contribution, the IRA distribution must            
          be rolled over into an IRA or other qualified plan within 60 days           
          of the distribution.  Sec. 408(d)(3); Lemishow v. Commissioner,             
          supra at 112; sec. 1.408-4(b)(1) and (2), Income Tax Regs.                  
               Petitioner argues that the $7,000 distribution from the                
          first Star Bank IRA is not included in her gross income because             
          the distribution was rolled over into her second Star Bank IRA              
          within 60 days.4  Petitioner received the distribution from the             

               4  On brief, petitioner argues that she rolled over an                 
          additional $3,653 into her T. Rowe Price IRA on Mar. 26, 1996.              

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