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on the language of section 162(a)(3), which prevents taxpayers
from deducting expenses for rental payments for property to which
the taxpayer has taken title or in which the taxpayer has equity,
and Missouri property law which provides that petitioners, as
tenants by the entireties, are each "'the owner of the entire
estate; neither of whom have any separate or joint interest'".
Morgan v. Finnegan, 87 F. Supp. 274, 276 (E.D. Mo. 1949), affd.
182 F.2d 649 (8th Cir. 1950) (quoting Murawski v. Murawski, 209
S.W.2d 262 (Mo. Ct. App. 1948)). Respondent concluded that
because Mr. Cox owned an interest in the property rented, he was
not entitled to claim a deduction for payments attributable
thereto. To prevent an inequitable situation, respondent also
deleted from Mrs. Cox's rental income the amount at issue.
Petitioner argues that our decision in Cox v. Commissioner,
supra, established that respondent intentionally disregarded the
rights of married women in general, and Mrs. Cox, in particular,
by refusing to recognize that the marital community is a distinct
entity with which Mr. Cox and his law practice may contract.
This statement is incorrect. In fact, we clearly stated that
"Petitioners, likewise, have failed to convince us that the
marital community is an entity separate and apart from petitioner
wife and petitioner husband." Id.
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