Carolyn Webb - Page 13

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          evidence to negate a finding that petitioner's earnings are                 
          community property.                                                         
               With respect to petitioner's unearned income, since the                
          source property is presumed to be community property, and Carolyn           
          Webb has failed to introduce evidence to the contrary, the income           
          from such property is also community property.  Estate of Frye v.           
          Commissioner, 44 B.T.A. 835 (1941); In re Estate of Miles, 72               
          Cal. App. 2d 336, 341 (1945).                                               
               On brief, respondent acknowledges that for 1992, the notice            
          of deficiency mailed to petitioner failed to include $16,050 in             
          rents earned by petitioner. However, respondent included this               
          amount in the proposed stipulation, which was sent to petitioner            
          and deemed admitted pursuant to Rules 91(f)(3) and 123(b).  Thus,           
          we sustain respondent's determination that the $16,050 is                   
          includable in petitioner's income for 1992.  Respondent does not            
          seek to hold Carolyn Webb liable for tax on one half of the                 
          $16,050, because she does not seek an increased deficiency                  
          against Carolyn Webb for 1992.  Petitioner did not object to this           
          allocation.  Accordingly, we sustain respondent's determination             
          that Carolyn Webb is liable for income tax on one half of all the           
          earned and unearned income in petitioner's name for 1990, 1991,             
          and 1992 to the extent of the income asserted against her by                
          respondent in the notice of deficiency.7  With respect to                   

          7     We have considered sua sponte whether sec. 66(a) applies              
          and hold that it does not.  Carolyn Webb does not meet the                  
                                                             (continued...)           



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