Gregory Eugene Thompson - Page 5




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               The recipient of amounts paid or distributed out of a                  
          retirement account generally includes the distributions in gross            
          income under the provisions of section 72.  Sec. 408(d)(1); see             
          also sec. 61(a)(9), (11); Arnold v. Commissioner, 111 T.C. 250,             
          253 (1998).  The amounts distributed from a retirement account              
          are generally included in the payee’s gross income for the                  
          taxable year in which the distribution is received.  Sec. 1.408-            
          4(a)(1), Income Tax Regs.                                                   
               The parties agree that the retirement plan was a qualified             
          retirement plan.  The parties also agree that petitioner actually           
          received the cash distribution in December 2004.  Accordingly,              
          petitioner must include the distribution in his income for 2004,            
          the year he received it.  See secs. 1.408-4(a)(1), 1.446-                   
          1(c)(1)(i), Income Tax Regs.                                                
               Petitioner argues that he intended to use the funds in 2005            
          and thus is not taxable on the funds until 2005.  Petitioner is             
          misguided.  He received the distribution in 2004 and was                    
          therefore taxable on the funds in 2004.  See secs. 1.408-4(a)(1),           
          1.446-1(c)(1)(i), Income Tax Regs.  Petitioner relies on various            
          subsections of section 72, such as (a), (b), and (h), to argue              
          that the distribution should not be included in his gross income            
          for any year.  Petitioner misapplies the subsections of section             
          72 upon which he relies.  The distribution from the retirement              
          account was not an annuity, and petitioner did not exercise any             
          option to receive an annuity with respect to the retirement                 
          account.                                                                    






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