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court determined that petitioner's interest in the net military
retirement pension was 20 percent. Because of this lack of
evidence, we can only assume that the district court followed
Texas State law in making its determination. Based on the
presumption that property possessed by either spouse upon divorce
is community property, and the lack of any evidence to rebut such
presumption, we conclude that the pension payments received by
petitioner represented petitioner's vested community property
interest in Col. Fulgham's military retirement pension. Because
Texas is a community property State and petitioner has a vested
interest in the pension, the entire pension did not become Col.
Fulgham's separate property upon the divorce. Thus, contrary to
petitioner’s contention, the entire pension is not taxable solely
to Col. Fulgham. See Denbow v. Commissioner, supra.
Under section 61(a), gross income includes all income from
whatever source derived, including pensions. See sec. 61(a)(11).
Military retirement pay is a pension. See Eatinger v.
Commissioner, T.C. Memo. 1990-310. If a spouse of a member of
the Armed Forces has a vested interest in the community income,
then the spouse must pay tax on that share of the income. See
Denbow v. Commissioner, supra. Because the $10,095 share of
disposable retired pay received by petitioner was from a
community property interest in a military pension, the payments
constitute income to petitioner under section 61(a)(11). See
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