- 6 -
use, of the taxpayer's money constitutes interest and is taxable
as such. Kieselbach v. Commissioner, 317 U.S. 399, 403 (1943).
The parties stipulated that a portion of each payment
petitioner received from Mr. Gibbs represented interest. The
stipulation on this point is certainly supported by the
underlying facts. The portion of each payment characterized by
the parties as interest is not only in accord with the divorce
decree, but is in accord with the traditional purpose for which
interest is paid, or received, as well. See Kieselbach v.
Commissioner, supra; Aames v. Commissioner, supra.
Considering the foregoing, it would appear that the issue
here under consideration should be resolved in respondent's favor
based upon section 61(a)(4) and the above-cited authorities.
However, the circumstances under which the interest was paid to
petitioner and the nature of her arguments oblige us to comment
further.
Petitioner points out that, incident to her divorce from
him, the payments she received from Mr. Gibbs were for her share
of SuperAmerica. That being the case, she argues that the
payments are excludable from her income under section 1041.
Pursuant to section 1041(a), no gain or loss is recognized on the
transfer of property from an individual to a spouse, or former
spouse, if the transfer is incident to divorce. See Balding v.
Commissioner, 98 T.C. 368, 370 (1992).
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011