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received only customary spousal and family support. Martin
appears to have used the majority of the embezzled funds to
finance his speculative investments, in which petitioner did not
participate and from which she did not benefit. Even were we to
assume that the defined benefit retirement plan and the luxury
cars were purchased with embezzled funds, such property was
forfeited to the U.S. Government pursuant to the forfeiture
agreement, and petitioner appears to have derived no benefit
therefrom.
The evidence in this case regarding the King's Point
residence, luxury cars, jewelry, and vacation trips simply
reflects petitioner's continuing, if not diminished, lifestyle
during the years in issue.
Respondent speculates that Martin's transfer, after his
conviction, to petitioner of title in the Kings Point residence
reflected: (1) An attempt to place the Kings Point residence out
of reach of the forfeiture agreement; and (2) an intent on
petitioner's behalf to interfere with the collection of criminal
penalties imposed upon Martin. Respondent thus suggests that it
would be inequitable for petitioner not to be held liable for the
income tax deficiencies and additions to tax at issue herein. We
disagree. Respondent's speculations are not supported by the
record.
We conclude that petitioner is not liable for the deficiency
in income tax and additions to tax for each year attributable to
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