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December 31, 1985. Petitioner did not file a Federal income tax
return for his 1985 taxable year. Respondent determined that all
$46,936 of petitioner's distribution was includable in his gross
income. Respondent's determination is based on an "indirect
method".5
OPINION
A. Income Tax on Distribution to Petitioner
The primary issues we must decide are whether and to what
extent Trust C's distribution of $46,936 to petitioner during
1985 is includable in his gross income for that year. Respondent
determined that the whole of the distribution was includable in
gross income because Trust C had sufficient DNI for its taxable
year ended February 28, 1985, as indicated on its Schedule K-1,
Beneficiary's Share of Income, Deductions, Credits, etc.
Respondent's determination is presumed correct, and the burden is
on petitioner to disprove her determination.6 Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933); Laird v.
Commissioner, 85 F.2d 598, 599 (3d Cir. 1935), affg. 29 B.T.A.
196 (1933). Petitioner contends that Trust C's distribution to
him is not includable in his 1985 gross income because Trust C
5 The parties have not explained respondent's indirect
method. The record indicates that respondent treated all of the
checks distributed to petitioner as taxable to him.
6 Petitioner alleges that the burden is on respondent
because respondent's reliance upon the Schedule K-1 is arbitrary
and erroneous. We disagree. The burden of proof is on
petitioner.
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