Estate Planning

U.S. Tax Court Rules on Exceptions to IRA Early Distribution Penalty

By Gregory Herman-Giddens

The United States Tax Court, in Benz v. Commissioner, 132 TC No 15, recently ruled that a taxpayer taking a series of equal periodic payments as an exception to the 10% early distribution penalty for IRA withdrawals could also take advantage the early distribution penalty exception for payment of higher education expenses without the education payment being considered a modification of the series of equal payments.

Those taxpayers who treated a similar situation in the last three years as a modification of their series of equal periodic payments and ended up paying the 10% penalty should consider filing amended returns.

 
 

Full post as published by North Carolina Estate Planning Blog on May 20, 2009 (boomark / email).