Gordon J. and Bonnie L. Schoof, (1998)

Extract

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Gordon J. and Bonnie L. Schoof, (1998)

110 T.C. No. 1

UNITED STATES TAX COURT GORDON J. AND BONNIE L. SCHOOF, ET AL.,1 Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket Nos. 4265-96, 6210-96, Filed January 12, 1998.

6394-96, 6617-96, 6761-96, 7632-96, 9362-96, 9490-96, 15341-96, 15342-96, 17606-96, 17607-96.

T, an individual, sought approval from the Internal Revenue Service to become a trustee of an individual retirement account (IRA) trust. During 1991, distributions out of individual retirement plans were made to Ps. Those distributions were then rolled over to the IRA trusts of which T was to be the trustee. Concurrently therewith each of the IRA trusts acquired a unit(s) (or fraction thereof) in an investment in a bus stop shelter program. 1. Held: T is not qualified to serve as a trustee of an IRA trust under sec. 408(a)(2), I.R.C., and sec. 1.408-2(b)(2), Income Tax Regs. 2. Held, further, the distributions to Ps were taxable in the year of distribution and were subject to the 10-percent additional tax pursuant to sec. 72(t), I.R.C. 3. Held, further, under Wood v. Commissioner, 93

T.C. 114 (1989), Ps did not substantially comply with the rollover contribution requirements of sec. 408(d), I.R.C., so as to exclude the distributions from in...

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