Lee v. Utah State Tax Commission

Justice DURHAM,

opinion of the Court:

INTRODUCTION

T1 Chin and Yvonne Lee appeal the Utah State Tax Commission's decision finding state tax lability on distributions from their qualified profit-sharing plan (Plan). The Tax Commission held that the Plan did not act as a conduit; therefore, the tax-exempt character of any funds in the Plan was lost upon distribution. We affirm.

BACKGROUND

2 In 1990, Mr. Lee established a defined benefit plan, which he converted in 1996 into a profit-sharing plan, both of which were qualified plans under Internal Revenue Code section 401 (Section 401). Employer…