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included in gross income. A fundamental principle of tax law is
that income is taxed to the person who earns it, when he earns it
or derives it from property he owns. See Commissioner v.
Culbertson, 337 U.S. 733, 739-740 (1949); Lucas v. Earl, 281 U.S.
111 (1930). Moreover, determining the ownership of property is a
question of fact. See Hang v. Commissioner, 95 T.C. 74, 80
(1990). The actual control over the property and the enjoyment
of profits from such property are of paramount importance in
establishing ownership. See Taylor v. Commissioner, 27 T.C. 361,
368 (1956), affd. 258 F.2d 89 (2d Cir. 1958).
The entire balance of the Vanguard Account, with the
exception of $98,000, was awarded to Ms. Jaffe in the property
settlement order dated September 13, 1994.5 Consequently, after
the date of divorce, Ms. Jaffe clearly held exclusive ownership,
control, and enjoyment of the Vanguard Account, and, thus, any
income earned by the account after this date is includable in her
1994 gross income. Accordingly, the Court holds that the
dividend income earned by and paid to the Vanguard Account after
5
The $98,000 awarded to Mr. Jaffe was removed from the
Vanguard Account shortly after the date of divorce; thus, the
Court does not consider any dividends earned on this $98,000
between the date of divorce and the date of the funds' removal
from the account to be significant. Moreover, any dividends so
earned were paid to the Vanguard Account after the date of
divorce and, thus, were under the exclusive ownership, control,
and enjoyment of Ms. Jaffe.
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