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Posted by PT on June 29, 2007, 6:07 pm
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Normally distributions from an IRA or qualified retirement
plan are subject to a 10% penalty tax unless an exception
applies. But I seem to recall that governmental plans
aren't "qualified plans" - that is, they're not subject to
IRS approval or scrutiny.
So suppose a taxpayer received a separation payout from the
California Teachers' Retirement System. None of the
exceptions in the Form 5329 instructions apply. Is this
distribution subject to the 10% penalty?
--
PT
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