- 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 Next
Last modified: November 10, 2007