IRA Distributions From Rolled-Over Funds Deductible in Oregon

Two taxpayers can deduct distributions from an individual retirement account despite the money originally being stored in a 401(k), the Oregon Tax Court held.

The state tax agency denied Steven and Christine Ward’s request because Oregon Revised Statutes 316.159(2) prohibits deductions from contributions made to 401(k) accounts. But what matters is the type of account the money is withdrawn from, not where it was originally saved, Presiding Magistrate Judge Allison R. Boomer ruled.

Because IRA distributions are listed in the statute as eligible for deductions, the Wards’ withdrawal qualifies, she held in a Nov. 14 decision.

“Defendant’s interpretation of the ...