- 22 -
become accustomed. That lifestyle did not change during the
years in issue. Petitioner received no large gifts from Gerald
during the years in issue, and the monthly allowance she used to
pay household expenses did not increase during the years in
issue.
We also consider whether the spouses have been divorced.
Friedman v. Commissioner, 53 F.3d at 532; Flynn v. Commissioner,
93 T.C. 355, 367 (1989). Petitioner and Gerald separated in
April 1984 and divorced in 1992. When they separated, petitioner
received the marital residence. Petitioner obtained a home
equity loan and used most of the proceeds to pay the tax
liabilities attributable to the 1975-77 deficiencies. Gerald
agreed to pay petitioner $5,000 a month to amortize the home
equity loan, but he reneged on that agreement. Given Gerald's
financial condition, we consider inconsequential any obligation
he may have had to reimburse petitioner pursuant to the
separation agreement. Petitioner avoided bankruptcy by selling
the marital residence and using the proceeds to pay the home
equity loan.
As for the deficiencies related to the years in issue,
Gerald and respondent entered into a settlement. Respondent
assessed deficiencies against Gerald for the taxable years 1978,
1979, and 1980, but Gerald filed in bankruptcy and was discharged
from liability.
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011