-14-
1171 (1979). Petitioner bears the burden of proving that she
received no significant benefit from the understatement other than
normal support, and this burden must be satisfied with specific
facts regarding lifestyle, expenditures, asset acquisitions, and the
disposition of the benefits of the understatement. See Estate of
Krock v. Commissioner, 93 T.C. 672 (1989).
It is also relevant to consider whether the spouse claiming
relief has been deserted, divorced, or separated. Kistner v.
Commissioner, T.C. Memo. 1995-66; sec. 1.6013-5(b), Income Tax Regs.
We also examine the probable future hardships that would be imposed
on the spouse seeking relief, if such relief were denied. Sanders
v. United States, 509 F.2d 162, 171 (5th Cir. 1975).
While petitioner's standard of living did not increase in 1988
in comparison to prior years, the Edmondsons continued living
together from 1988 until 1992. Thus, they shared equally in the tax
savings generated by the understatement. In this regard, part of
the disallowed deductions (from which tax savings were derived)
related to: A failed business that both Mr. Edmondson and
petitioner operated; the Floyd Avenue house in which they both
lived; and a Mexican trip that benefited petitioner as well as Mr.
Edmondson.
The proceeds from the gain on the sale of the Seattle house
went to pay living expenses for the entire Edmondson household, as
well as the debts of the failed business. Moreover, Mr. Edmondson
gave petitioner $500 a month for 36 months following the end of
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011