Jeffrey Lee Golian - Page 6




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          T.C. 337, 340 (1996); see also S. Rept. 93-383, at 134 (1973),              
          1974-3 C.B. (Supp.) 80, 213.5                                               
               The 10-percent additional tax does not apply to certain                
          distributions, including distributions:  (1) To an employee age             
          59-1/2 or older; (2) on account of the employee’s disability; (3)           
          as part of a series of substantially equal periodic payments made           
          for the employee’s life (or life expectancy); or (4) to an                  
          individual from an IRA which are qualified first-time home buyer            
          distributions.6  Sec. 72(t)(2)(A)(i), (iii), and (iv), (F).                 
               Petitioner does not dispute that the $86,333.33 distribution           
          from his IRA was an early distribution from a qualified                     
          retirement plan.  Indeed, petitioner properly included the                  
          distribution in gross income.7                                              




               5  At trial, petitioner accurately described his IRA as an             
          account “for my retirement.”  This is precisely why a                       
          preretirement distribution is generally subject to the 10-percent           
          additional tax and why there are relatively few exceptions.  “The           
          legislative purpose underlying the section 72(t) tax is that                
          ‘premature distributions from IRA’s frustrate the intention of              
          saving for retirement, and section 72(t) discourages this from              
          happening.’”  Arnold v. Commissioner, 111 T.C. 250, 255 (1998),             
          quoting Dwyer v. Commissioner, 106 T.C. 337, 340 (1996).                    
               6  For purposes of sec. 72(t), the term “employee” includes            
          (in the case of an individual retirement plan) the individual for           
          whose benefit the plan was established.  Sec. 72(t)(5).                     
               7  Generally, a distribution from an IRA is includable in              
          the distributee’s gross income in the year of distribution under            
          the provisions of sec. 72.  See sec. 408(d)(1); see also sec.               
          61(a)(9), (11); Arnold v. Commissioner, supra at 253.                       





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