- 9 -
Therefore, we look to section 1402(a)(5), which provides as
follows:
(5) if-
* * * * * * *
(B) any portion of a partner's distributive
share of the ordinary income or loss from a
trade or business carried on by a partnership
is community income or loss under community
property laws applicable to such share, all
of such distributive share shall be included
in computing the net earnings from self-
employment of such partner, and no part of
such share shall be taken into account in
computing the net earnings from self-
employment of the spouse of such partner;
We find that the income from Trucking is properly attributable to
Mr. Thompson. Petitioner had nothing to do with the management
or control of Trucking. Other than making a few deposits or
cashing some checks under the specific direction of Mr. Thompson,
petitioner was not involved in the operations of Trucking.
Accordingly, the second part of section 66(c)(2) is satisfied
with respect to the income derived from Trucking.
The issue of whether petitioner knew or should have known of
the unreported income is essentially factual. We are convinced
that petitioner had no actual knowledge of the unreported income.
However, petitioner must also prove that a reasonably prudent
person with her knowledge of surrounding circumstances would not
and should not have known of the understatement, keeping in mind
her level of intelligence, education, and experience. Sanders v.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011