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Attached to petitioners' 2001 return are three Forms 1099-R,
Distributions From Pensions, Annuities, Retirement or Profit-
Sharing Plans, IRAs, Insurance Contracts, etc. Those Forms 1099-
R, which were prepared by petitioner, show the following
distributions to petitioner:
Distribution Amount
OCTFCU $12,118
SBC 1, 2, 3 32,000
SBC 401K 44,180
Total 88,298
Petitioners' return for 2001 reports "Total IRA
distributions" of $12,118 on line 15b and "Total pensions and
annuities" of $76,180 on line 16b. The latter amount comprises
the distributions from petitioner's retirement account or
accounts with SBC (viz $32,000 plus $44,180).
Attached to petitioners' 2001 return is Internal Revenue
Service Form 5329, Additional Taxes on Qualified Plans (Including
IRAs) and Other Tax-Favored Accounts. Part I of that form,
dealing with the "Tax on Early Distributions", reports that early
distributions of $88,298 are included in petitioners' gross
income. Of that amount, Form 5329 reports that $63,298 is
subject to the additional tax under section 72(t)(1) and $25,000
is not subject to the additional tax on account of an
"appropriate exception". The exception claimed on the form is
for:
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Last modified: March 27, 2008