Richard Mark Hilton - Page 6




                                        - 5 -                                         
               Pursuant to section 408(d)(3), a distribution to the                   
          individual for whose benefit an IRA is maintained is excluded               
          from gross income if the entire amount is paid into an IRA, an              
          individual retirement annuity, or an eligible retirement plan for           
          the benefit of the same individual within 60 days.                          
               Petitioner concedes that he knew that there is a 60-day                
          requirement to make a nontaxable rollover.  Petitioner testified            
          that his intent, however, was not to roll over the distribution.            
          Petitioner wanted to transfer the distribution into a type of               
          retirement investment that would permit him to take the funds out           
          as a loan and not as a taxable distribution.                                
               Regardless of petitioner’s intent, the distribution is                 
          treated as income unless it complies with the 60-day rollover               
          requirement under section 408(d)(3)(A) or with another exception            
          enumerated under section 408(d).  It was approximately 5 months             
          from petitioner’s receipt of the distribution before he deposited           
          $41,000 of the original $50,000 distribution into an IRA.  The              
          distribution is income because petitioner did not make a rollover           
          into an IRA of any of the distribution within the 60-day period             
          required by section 408(d)(3)(A), and no other exceptions apply.            
               Moreover, the distribution is subject to a 10-percent                  
          additional tax under section 72(t)(1) for early withdrawal since            
          petitioner stipulated that none of the exceptions under section             
          72(t)(2) applies.                                                           







Page:  Previous  1  2  3  4  5  6  7  8  9  10  Next 

Last modified: November 10, 2007