Patti Ann Ollestad - Page 9

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          Therefore, we look to section 1402(a)(5), which provides as                 
               (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.           

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