UNITED STATES TAX COURT
JAIME PENA and VERNA ANN PENA, Petitioners v
.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 17613-99. Filed April 17, 2001.
Jaime Pena, pro se.
Usha Ravi
, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
CARLUZZO, Special Trial Judge
: Respondent determined a deficiency of $7,054 in petitioners' 1996 Federal income tax. The issue for decision is whether certain distributions from an individual retirement account are includable in petitioners’ 1996 income.
made by petitioner as trustee of the plan. In June 1987, on petitioner’s behalf and at his direction, the plan invested $25,972.82 in corporate securities. During 1990, the plan was terminated and the proceeds of the Kidder account were transferred (rolled) into an individual retirement account at Daking Securities Corporation (the IRA). The IRA was established for the benefit of petitioner, who as its custodian, directed how IRA funds were to be invested. Petitioners did not include any of the proceeds rolled over from the Kidder account to the IRA in their 1990 income.
During 1996, petitioner, who was 49 years old as of the close of that year, received distributions totaling $21,700 from the IRA (the IRA distributions). Petitioners did not include any of the IRA distributions in the income they reported on their 1996 Federal income tax return, which includes a Schedule D, Capital Gains and Losses. Nothing on the return suggests that any of the transactions listed on the Schedule D relate to investments of the plan or the IRA.
In the notice of deficiency, respondent determined that the
IRA distributions received by petitioner in 1996 are includable in petitioners’ income for that year. Other determinations made in the notice of deficiency are not in dispute.
OPINION
In their petition, petitioners allege that the deficiency in this case is based upon respondent’s “determination that petitioners could not take ordinary losses, in the year of distribution of all of the proceeds, on stock previously held in an exempt employees trust.” Petitioners are mistaken on this point. As noted above, the deficiency in this case is based, in large part, upon respondent’s determination that the IRA distributions received by petitioner in 1996 are includable in petitioners’ income for that year.
Elsewhere in the petition, petitioners allege that during
1996 “the stock was sold at prices below what had been paid for it by the trust” and that the proceeds of the sale “were distributed to petitioners and nothing was left in the trust”. According to the petition, the “aggregate of the proceeds was less than what had been contributed by the employer into the trust”. In their brief, petitioners argue that “investment losses were incurred by the plan” and therefore they “duly listed, on Schedule D, their investment losses exceeding gains incurred by the plan in 1996".
The allegations contained in the petition and the argument presented in petitioners’ brief relate only to whether petitioners are entitled to a deduction for investment losses sustained by the plan; none of their allegations or arguments To reflect the foregoing, Decision will be entered for respondent .