Roger F. and Mary A. Duronio - Page 3




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               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.                               





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Last modified: November 10, 2007