Ramzy M. and Lena Kopty - Page 12




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              During 2000, the money invested in petitioner’s IRA earned              
         mutual fund dividends in the amount of $141.27.  During that                 
         year, petitioner requested distributions of $10,000 from his IRA.            
         By the end of 2000, the value of petitioner’s IRA was zero.                  
         Wells Fargo Investments, LLC, later issued a Form 1099-R to                  
         petitioners reporting gross distributions of $10,000 from                    
         petitioner’s IRA during the year 2000.  The record of this case              
         suggests that Wells Fargo Bank acquired Norwest, but it does not             
         say when the acquisition took place.                                         
              Petitioners filed their Federal income tax return for 1998              
         on October 18, 2000.  The return had been prepared by Arthur                 
         Anderson.  Consistent with the Form 1099-R issued to petitioners             
         by Wells Fargo Bank, and the Form 5498, IRA Contribution                     
         Information, issued by Norwest Bank Minnesota, N.A., petitioners’            
         1998 return reports total pensions and annuities of $467,817.                
         Petitioners’ 1998 return reports that the taxable amount of the              
         distribution is “NONE”.  Petitioners’ 1998 return also reports               
         income tax withholding of $51.  Finally, petitioners’ 1998 return            
         reports none of the dividend income earned by petitioners’ IRA               
         during 1998 in the aggregate amount of $1,832.25.                            
              In passing, we note that by October 18, 2000, when                      
         petitioners filed their return for 1998, and reported that "NONE"            
         of the ESOP distribution was taxable, they had already withdrawn             
         most, if not all, of the money from the IRA.  Stated differently,            







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