Date of Distribution Controls For IRA Distribution Penalty Purposes.

The petitioner suffered from Type 2 diabetes and lost his job as a result.  He made a withdrawal from his IRA before reaching age 59.5 and claimed that he was exempt from the 10 percent early distribution penalty.  Six weeks after the withdrawal, the petitioner went into a diabetic coma, was hospitalized for over a week and filed for disability.  The IRS claimed that the petitioner was not disabled on the date of the distribution as required b y I.R.C. Sec. 72(t)(2)(A)(iii) and, thus, owed the 10 percent penalty.  The court agreed with the IRS because the petitioner did not prove that he was disabled before and at the time of the distribution.  Trainito v. Comr., T.C. Sum. Op. 2015-37.