- 56 -
(contingent legal fee taxable to lawyer who earned it, not spouse
who was awarded it). But see Siegel v. United States, 464 F.2d
891, 894 (9th Cir. 1972) ("the line between earned income and
income from property is not always marked with dazzling
clarity").
Even though there may be a personal service element in the
income from the operation of a cemetery, this record provides no
factual basis for separating that element from the income from
mausoleum crypt sales, nor do we see any proper theoretical
ground for doing so. Moreover, Howard and Alice had both
delegated the management and operation of Woodbine to Gregg
Kunkowski.
Respondent's position that the assignment of income
principle can apply to transfers of property with economically
accrued income elements, see Rev. Rul. 87-112, 1987-2 C.B. 207,
so as to trump section 1041, has been criticized as "an
unfortunate step backward into the judicial confusion created by
the Davis rule". McCaffery & Salten, Structuring the Tax
Consequences of Marriage and Divorce, sec. 604, at 144 (1995)
(citing Asimow, "The Assault on Tax-Free Divorce: Carryover Basis
and Assignment of Income", 44 Tax. L. Rev. 65, 91-112 (1988)).
But see Gabinet, "Section 1041: The High Price of Quick Fix
Reform in Taxation of Interspousal Transfers", 5 Am. J. Tax Pol.
13 (1986). The concerns expressed by McCaffery & Salten, supra
at 145, extend beyond the resulting uncertainty for parties
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