- 9 - December 31, 1985. Petitioner did not file a Federal income tax return for his 1985 taxable year. Respondent determined that all $46,936 of petitioner's distribution was includable in his gross income. Respondent's determination is based on an "indirect method".5 OPINION A. Income Tax on Distribution to Petitioner The primary issues we must decide are whether and to what extent Trust C's distribution of $46,936 to petitioner during 1985 is includable in his gross income for that year. Respondent determined that the whole of the distribution was includable in gross income because Trust C had sufficient DNI for its taxable year ended February 28, 1985, as indicated on its Schedule K-1, Beneficiary's Share of Income, Deductions, Credits, etc. Respondent's determination is presumed correct, and the burden is on petitioner to disprove her determination.6 Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933); Laird v. Commissioner, 85 F.2d 598, 599 (3d Cir. 1935), affg. 29 B.T.A. 196 (1933). Petitioner contends that Trust C's distribution to him is not includable in his 1985 gross income because Trust C 5 The parties have not explained respondent's indirect method. The record indicates that respondent treated all of the checks distributed to petitioner as taxable to him. 6 Petitioner alleges that the burden is on respondent because respondent's reliance upon the Schedule K-1 is arbitrary and erroneous. We disagree. The burden of proof is on petitioner.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011