- 4 -
During 1992, petitioner was a sole proprietor and reported a
net profit from his C.P.A. business on the return for that year.
For the 1992 taxable year, petitioner did not pay any self-
employment tax.
OPINION
I. Petitioner's Taxable Income
During 1992, petitioner and Mrs. Condello resided in Texas.
Texas is a community property state. Tex. Fam. Code Ann. secs.
3.001-3.005. (Vernon 1998); Lange v. Phinney, 507 F.2d 1000, 1005
(5th Cir. 1975). Under Texas law, community property includes
property acquired during the marriage by either spouse except for
property acquired by gift, devise, descent, or in the recovery
for personal injuries. See Tex. Fam. Code Ann. secs. 3.001,
3.002. Income derived during marriage from separate property is
also community property. Maben v. Maben, 574 S.W.2d 229, 232
(Tex. Civ. App. 1978). Generally, for Federal income tax
purposes, spouses residing in a community property state must
report one-half of their community income (the general rule).
United States v. Mitchell, 403 U.S. 190 (1971). Neither party
contests that petitioner's 1992 income was community income.
Thus, under the general rule, petitioner should report only one-
half of his and Mrs. Condello's 1992 community income.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011