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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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Last modified: March 27, 2008