Gallade v. Commissioner
United States Tax Court
C, P's wholly owned corporation, operated a pension plan in which P participated. Because of C's poor financial disposition, P executed a "waiver", to assign his fully vested, accrued benefits to C. Due to the waiver, P did not report any taxable distribution.
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C, P's wholly owned corporation, operated a pension plan in which P participated. Because of C's poor financial disposition, P executed a "waiver", to assign his fully vested, accrued benefits to C. Due to the waiver, P did not report any taxable distribution. R determined that P's waiver was an impermissible attempt to assign or alienate his benefits in violation of sec. 206(d)(1) of ERISA and sec. 401(a)(13), I.R.C. 1. Held: P received a taxable distribution. 2. Held, further, the distribution was received by P in 1986. 3. Held, further, R abused her discretion by failing to waive the…
1Opinion of the Court
Gerber, Judge:
Respondent alternatively determined a $540,716 income tax deficiency and a $135,179 addition to tax under section 66611 for the 1985 tax year, or a $537,808 income tax deficiency and a $107,562 addition to tax under section 6661 for the 1986 tax year. The issues remaining for our consideration are: (1) Whether petitioner’s waiver of his pension plan benefits and use of them by his wholly owned corporation resulted in a taxable distribution to him; (2) if it is a taxable distribution, whether it is recognizable in 1985 or 1986; and (3) whether petitioner is liable for an addition…
2Cases cited26 opinions
- Lucas v. EarlSupreme Court of the United States · 1930
- Guidry v. Sheet Metal Workers National Pension FundSupreme Court of the United States · 1990
- Pallottini v. CommissionerUnited States Tax Court · 1988
- Mailman v. CommissionerUnited States Tax Court · 1988
- James Karr and Nancy L. Karr v. Commissioner of Internal RevenueCourt of Appeals for the Eleventh Circuit · 1991
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