                   T.C. Summary Opinion 2003-157



                      UNITED STATES TAX COURT



                 DARRELL R. FULCHER, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent


     Docket No. 14140-01S.              Filed October 21, 2003.


     Darrell R. Fulcher, pro se.

     Dustin M. Starbuck, for respondent.



     COUVILLION, Special Trial Judge:    This case was heard

pursuant to section 7463 in effect at the time the petition was

filed.1   The decision to be entered is not reviewable by any

other court, and this opinion should not be cited as authority.

     Respondent determined a deficiency of $894 in petitioner's

1999 Federal income tax.



     1
          Unless otherwise indicated, subsequent section
references are to the Internal Revenue Code in effect for the
year at issue.
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     The sole issue for decision is whether petitioner is liable

for the 10-percent additional tax under section 72(t) for early

distributions from two qualified retirement plans.

     Some of the facts were stipulated.   Those facts and the

accompanying exhibits are so found and are incorporated herein by

reference.   Petitioner's legal residence at the time the petition

was filed was Martinsville, Virginia.

     During 1999, petitioner received the following distributions

from two qualified individual retirement accounts:


     Nationwide Life Insurance Co.            $5,000.00
     First National Bank                       3,943.33
      Total distributions                     $8,943.33


Both institutions issued to petitioner Forms 1099-R,

Distributions From Pensions, Annuities, Retirement or Profit-

Sharing Plans, IRAs, Insurance Contracts, etc.   The Form 1099-R

from Nationwide Life Insurance Co. stated that the taxable amount

of the $5,000 distribution was $4,700.47.   On his Federal income

tax return for 1999, petitioner included $8,643.80 as income,

representing the taxable distributions from the two plans.    In

the notice of deficiency, respondent determined that petitioner

was liable for the additional tax under section 72(t) for early

distributions from qualified retirement plans.   Petitioner

contends he is not liable for the additional tax because the
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proceeds of the distribution were used to purchase a home as a

first-time homeowner under section 72(t)(8).

     During 1999, petitioner was employed by several employers

doing electrical maintenance work.      Petitioner married on July 1,

1999, and he and his spouse purchased a home in August 1999,

which they moved into.    Sometime in December 1999, petitioner and

his spouse separated; however, petitioner continued living in the

house.    Petitioner had previously been married but was divorced

in 1990.    During the first marriage, petitioner served in the

United States military, and he and his spouse never purchased a

home.    His testimony is that the home purchased in August 1999

was the first home he had ever purchased, and that the proceeds

of the two distributions in question were applied to the $54,000

purchase price for the home.    Respondent presented no evidence to

discredit petitioner's testimony, nor did respondent present any

other evidence to establish that the August 1999 home purchase

was not petitioner's first home purchase, or that the individual

retirement accounts proceeds in question were not applied to the

purchase price of the home.

     Section 72(t)(1) imposes a 10-percent additional tax on

early distributions from qualified retirement plans.     There are

several situations, however, in which the additional tax does not

apply.    Pertinent to this case is section 72(t)(2)(F), which

provides generally that the additional tax does not apply to
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distributions that qualify as first-time homebuyer distributions

as defined in section 72(t)(8).   Section 72(t)(8)(A) provides

generally that the term "qualified first-time homebuyer

distribution" means any payment or distribution received by an

individual to the extent such payment or distribution is used by

the individual before the close of the 120th day after the day on

which such distribution or payment is received to pay qualified

acquisition costs with respect to a principal residence of a

first-time homebuyer who is such individual, the spouse of such

individual, or any child, grandchild, or ancestor of such

individual or the individual's spouse.   Section 72(t)(8)(D)

defines a first-time homebuyer as an individual (and, if married,

his spouse) who had no present ownership interest in a principal

residence during the 2-year period ending on the date of

acquisition of the principal residence in question.    Other

provisions in that section are not pertinent here.

     On this record, the Court is satisfied that the

distributions in question constituted distributions that were

used by petitioner in the acquisition of a principal residence,

and that such distributions were qualified first-time homebuyer

distributions within the intent and meaning of section 72(t)(8).

Petitioner, accordingly, is sustained on the sole issue before

the Court.
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    Reviewed and adopted as the report of the Small Tax Case

Division.

                                     Decision will be entered

                             for petitioner.
