- 14 - that it would be inequitable to hold her liable for the substantial understatement-related deficiency. Sec. 6013(e)(1)(D). One of the factors to be considered is whether the "innocent" spouse received significant benefits as a result of the understatements. Friedman v. Commissioner, 53 F.3d at 532; sec. 1.6013-5(b), Income Tax Regs. Normal support, measured by the circumstances of the parties, is not considered a significant benefit for purposes of this determination. Id., Flynn v. Commissioner, 93 T.C. 355, 367 (1989). There is no evidence that petitioner received any unusual benefit from the tax shelter deduction. Harvey controlled the family finances, and did not allow petitioner to have access to the couple's money beyond that which he, Harvey, chose to give her. Even if part of the understatements did inure to petitioner's benefit, such benefit did not exceed normal support. At the trial respondent attempted to attach significance to the fact that in 1986 petitioners sold their Hewlett Bay Park house for $725,000, which they had purchased in 1973 for approximately $118,000. Since the record contains no indication that the house was in any way enhanced by the money generated by tax savings in the relevant years, we cannot attribute a tax generated benefit to Arlene in connection with the increased value of the house. Increases in values merely through inflation, which in this case would also include not only thePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
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