- 4 -
indicated that if basis information was not necessary, they could
provide the Forms 8606 sooner.
Respondent did not receive the Forms 8606 from petitioners
and issued a notice of deficiency in January 2006 determining a
deficiency of $2,681 in petitioners’ joint income tax for 2003.
Respondent determined that the Roth IRA distributions were
includable in gross income and asserted a 10-percent early
withdrawal penalty.
In a letter dated April 1, 2006, petitioners enclosed Forms
8606 indicating that no portion of the Roth IRA distributions was
taxable. The letter states that petitioners used the Roth IRA
distributions for qualified first-time homebuyer expenses. The
letter also states that petitioners had been attempting to
complete the Forms 8606 for some time but had been unable to
obtain basis information. Petitioners wrote in part that
“figuring out what [they] spent on stocks [they] bought as far
back as 1996 has been difficult to impossible.”
The petition herein was filed on April 14, 2006.
Petitioners’ case was assigned to an Appeals officer on May 16,
2006. After reviewing the file and performing research, the
Appeals officer concluded on May 18, 2006, that the notice of
deficiency was correct because a distribution from a Roth IRA
could not qualify for the first-time homebuyer expense exception.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: November 10, 2007