McGaugh v. Commissioner

DeGUILIO, District Judge.

This appeal from the Tax Court addresses whether a taxable distribution occurs where an individual directs his IRA custodian to wire funds directly from his IRA to purchase securities, but his custodian does not accept the resulting share certificate. For the reasons that follow, we conclude that the petitioner was never in actual or constructive receipt of funds from his IRA. Accordingly, we affirm the judgment of the Tax Court.

I

Petitioner Raymond MeGaugh has had an Individual Retirement Account (IRA) with Merrill Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch)…