T.C. Memo. 1999-62
UNITED STATES TAX COURT
VIOLET A. REYNOLDS, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 5708-97. Filed March 4, 1999.
P and H cohabited for 24 years, H earning the
income and P primarily taking care of the household.
After H terminated the relationship, H sued P for
ejectment, trespass, and conversion, praying in his
complaint mainly for a judgment stating that P had no
interest in property that was purchased during their
relationship. P, in her answer, alleged that she had
an equitable interest in the property. H, in
settlement of the lawsuit, generally agreed to pay P
$153,500 to perfect his sole ownership of all the
property. R determined that the portion of the
settlement that P received during the subject year was
paid to her as compensation for the homemaking services
that she provided during the relationship.
Held: H paid P the disputed amount in
satisfaction of her interest in the property, an
interest that she had received as a gift from H during
their relationship. Because P's basis in the property
is greater than the settlement amount, none of the
disputed amount is income to her.
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