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1991, 1992, and 1993 Federal income taxes in the amounts of
$2,520, $1,699, and $1,232, respectively.
The issue for decision is whether petitioner must include in
income interest paid to her by her former spouse pursuant to a
decree of divorce.
Background
This case was submitted fully stipulated. The stipulated
facts are incorporated into our findings by this reference. At
the time that the petition was filed in this case, petitioner
resided in Hartley, Iowa.
On November 20, 1976, petitioner married Bertrum C. Gibbs,
Jr. (Mr. Gibbs). During their marriage they opened and operated
a convenience store called SuperAmerica. As best as can be
determined from the record, SuperAmerica was organized as a sole
proprietorship.
By Judgment and Decree dated February 12, 1990 (the divorce
decree), the Iowa District Court for O'Brien County (the district
court) dissolved the marriage between petitioner and Mr. Gibbs.
In connection with their divorce, petitioner and Mr. Gibbs agreed
upon the division of much of the marital property; however, the
value and division of SuperAmerica was contested in the divorce
proceeding. After determining the value of SuperAmerica to be
$250,000, the district court concluded that Mr. Gibbs should
retain ownership of it upon the payment of $122,500 to petitioner
for her equitable interest in the property. Specifically, the
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