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partner as debtor is filed in bankruptcy. [Sec.
301.6231(c)-7T(a), Temporary Proced. & Admin. Reg., 52 Fed.
Reg. 6793 (Mar. 5, 1987).]
The effect of the conversion is to remove the debtor-partner from
the partnership proceeding and subject the converted items to the
deficiency procedures applicable to the partner's individual tax
case. Computer Programs Lambda, Ltd. v. Commissioner, supra at
203.
Nature of Mrs. Scarfia's Interest in the Partnership
In order to assess the impact of the bankruptcy rule upon
Mrs. Scarfia, we must first ascertain the nature of her interest,
if any, in the partnership. State law determines ownership of
property, and Federal income tax liability follows ownership.
United States v. Mitchell, 403 U.S. 190, 197 (1971). It is
undisputed that the Scarfias resided in the State of Florida for
all periods relevant to this proceeding. Therefore, we apply the
laws of Florida to ascertain the nature of Mrs. Scarfia's
interest, if any, in Mr. Scarfia's partnership investment.
Florida is not a community property State.6 Herrera v.
Herrera, 673 So.2d 143, 144 (Fla. Dist. Ct. App. 1996); Green v.
Green, 442 So.2d 354, 355 (Fla. Dist. Ct. App. 1983). The
Florida constitution provides generally that: "There shall be no
6
Although not relevant to the instant matter, we note
that community property principles have taken root in Florida to
a limited degree. See Florida Uniform Disposition of Community
Property Rights at Death Act, Fla. Stat. Ann. secs. 732.216-
732.228 (West 1995).
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