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We must next decide whether this income is community
property income.2 Under Washington law, with certain exceptions,
all property (including compensation earned by a spouse) acquired
after marriage is presumed community property and treated as
acquired or earned by each spouse. See Wash. Rev. Code Ann.
secs. 26.16.010 through 26.16.030 (West 1997); Zielasko v.
Commissioner, T.C. Memo. 1993-177. Community property income is
attributable 50 percent to each spouse. See Poe v. Seaborn, 282
U.S. 101 (1930). Petitioners presented no evidence demonstrating
that Mr. Morin's compensation, the prizes, or the retirement
distribution are not community property. Therefore, we conclude
that under Washington law this income is community property and
must be allocated 50 percent to each petitioner. See also Rule
142(a).
Respondent also determined that the retirement distribution
is subject to an additional tax pursuant to section 72(t).
2 Respondent, in the separate notices of deficiency sent to
Mr. Morin and Mrs. Morin, determined: (1) Mr. Morin is taxable
on 100 percent of (a) the compensation he received from Les Morin
Subaru, (b) the retirement distribution he received from Common
Sense Shareholder Services, and (c) the prizes he received from
Subaru of America, Inc.; (2) Mrs. Morin is taxable on 100 percent
of the gain from her sale of real property; (3) Mr. Morin is
taxable on 50 percent of the gain received by Mrs. Morin; and (4)
Mrs. Morin is taxable on 50 percent of the net income earned by
Mr. Morin.
Respondent took these inconsistent positions to protect
respondent's rights under Washington law because petitioners were
uncooperative married nonfilers.
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