Richard Mark Hilton - Page 3




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          entered is not reviewable by any other court, and this opinion              
          shall not be treated as precedent for any other case.                       
               Respondent determined for 2003 a deficiency in petitioner’s            
          Federal income tax of $26,416 and a section 6662(a) accuracy-               
          related penalty of $5,283.                                                  
               After concessions,1 the issues for decision are:  (1)                  
          Whether petitioner failed to report as income a distribution from           
          an individual retirement account (IRA) in 2003, (2) whether                 
          petitioner received cancellation of indebtedness income in 2003,            
          and (3) whether petitioner is liable for a section 6662(a)                  
          accuracy-related penalty.                                                   
                                     Background                                       
               The stipulation of facts and the exhibits received into                
          evidence are incorporated herein by reference.  At the time the             
          petition in this case was filed, petitioner resided in Boulder,             
          Colorado.                                                                   
               Petitioner and his spouse filed jointly for 2003, a Form               
          1040, U.S. Individual Income Tax Return.                                    



               1Respondent concedes that the distribution of $4,272 from              
          petitioner’s Medical Savings Account in 2003 is not includable as           
          income because petitioner substantiated that the distribution was           
          spent on medical expenses.  Petitioner concedes that the                    
          distribution of $22,000 from a traditional IRA managed by Gabelli           
          Asset Fund in 2003 is income.  Petitioner also concedes that the            
          distribution of $22,000 is subject to a 10-percent additional tax           
          under sec. 72(t)(1) for early withdrawal.                                   







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