- 8 -
on account No. 2046133 held at Mountain Valley National Bank in
Conifer, Colorado, in the taxable years 1991, 1992, and 1993.
OPINION
Married persons who reside in a community property State are
generally each required to report one-half of their community
income for Federal income tax purposes. See United States v.
Mitchell, 403 U.S. 190 (1971); Drummer v. Commissioner, T.C.
Memo. 1994-214, affd. without published opinion 68 F.3d 472 (5th
Cir. 1995). Petitioner contends that under Arizona law, his
1991, 1992, and 1993 income is community income and that he is
required to report and be taxed on only one-half of that
community income for Federal tax purposes.
On brief, respondent relies solely on the provisions of
section 66(b) to deny petitioner the income-splitting benefits of
Arizona's community property law. Section 66(b) provides:
The Secretary may disallow the benefits of any
community property law to any taxpayer with respect
to any income if such taxpayer acted as if solely
entitled to such income and failed to notify the
taxpayer's spouse before the due date (including
extensions) for filing the return for the taxable
year in which the income was derived of the nature
and amount of such income.
I. Nature of Petitioner's Income
The law of the State where the acquiring spouse is domiciled
at the time applies to determine whether the property is
community property or not. See Restatement (Second) Conflict of
Laws sec. 258 comment (c) (1971), as cited in the Arizona case of
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011