- 4 - taxpayer and a taxpayer’s children at an eligible educational institution qualify as educational expenses. Sec. 72(t)(7); sec. 529(e)(3)(A) and (B). Petitioners argue that because money is fungible petitioners’ December 2001 $18,000 NYU tuition payment for their son should be deemed to have been funded not in 2001 but in 2002 by the $19,900 early IRA distribution Mary received. Petitioners also appear to argue that they guaranteed their son’s 2002 $19,263 student loan and that petitioners’ loan guarantee should be treated as a $19,263 payment on their son’s educational expenses. Petitioners also allege that in 2002 petitioners paid other miscellaneous educational expenses of their son. We reject petitioners’ arguments. Petitioners’ December 2001 $18,000 tuition payment for their son may have necessitated Mary’s $19,900 2002 early IRA distribution. However, qualified higher educational expenses paid in a year other than the year of an early IRA distribution do not reduce the amount of the early distribution subject to the 10-percent additional tax. See Lodder-Beckert v. Commissioner, T.C. Memo. 2005-162. Because petitioners have not produced credible evidence that they guaranteed the $19,263 student loan their son obtained in 2002, we do not address the merits of petitioners’ argument thatPage: Previous 1 2 3 4 5 NextLast modified: November 10, 2007