- 3 - On petitioners’ timely filed 2002 joint Federal income tax return, petitioners reported Mary’s entire $19,900 early IRA distribution as taxable, but petitioners did not calculate thereon a section 72(t)(1) early distribution 10-percent additional tax. On audit, respondent determined that the section 72(t)(1) 10-percent additional tax applied to Mary’s $19,900 early IRA distribution. OPINION In general, a distribution from an IRA to a taxpayer prior to the taxpayer attaining age 59-1/2 is subject to a 10-percent additional tax on the taxable amount of the early distribution. Sec. 72(t)(1). Among other exceptions not here relevant, a taxpayer may be able to reduce the amount of an early distribution from an IRA that is subject to the 10-percent additional tax by the amount of a taxpayer’s qualified higher educational expenses paid in the year of the early distribution (educational exception).1 Sec. 72(t)(2)(E). Generally, tuition, fees, books, supplies, equipment, and, in some circumstances, room and board relating to attendance by a 1 The sec. 72(t)(2)(E) higher educational exception applies only to qualified plans that meet the sec. 7701(a)(37) definition of an individual retirement plan, i.e., individual retirement accounts and individual retirement annuities.Page: Previous 1 2 3 4 5 NextLast modified: November 10, 2007