Ramzy M. and Lena Kopty - Page 27




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         Indeed, it appears that Mr. Kopty may have executed the form even            
         before he returned to Norwest the paperwork necessary to permit              
         the registration and sale of the shares.  As mentioned above, the            
         completed paperwork to permit the registration and sale of                   
         petitioner’s stock was not received from petitioner by Norwest’s             
         office in Boulder until October 7, 1998.                                     
              Based on the facts of this case, we find that Mr. Kopty made            
         an irrevocable election to roll over, to his IRA, the                        
         distribution of stock he had received from the J.D. Edwards ESOP.            
         We further find that petitioner made this irrevocable election               
         within the 60-day period required by section 402(c)(3).                      
         Ten Percent Additional Tax on Early Distributions                            
              The second issue in this case is whether petitioners are                
         liable for the 10-percent additional tax on early distributions              
         from qualified retirement plans imposed by section 72(t)(1).                 
         Respondent applied the 10-percent additional tax on the aggregate            
         distributions of $331,500 made by petitioner’s IRA in 1999 and               
         the aggregate distributions of $10,000 made by the IRA in 2000.              
         Accordingly, respondent determined taxes under section 72(t)(1)              
         for 1999 and 2000 in the amounts of $31,500 and $1,000,                      
         respectively.                                                                
              Petitioners argue that section 72(t)(1) does not apply to               
         any of the subject distributions because all of them qualify                 
         under the exception set forth in section 72(t)(2)(A)(iii) for                







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