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In Rose v. Commissioner, supra, the taxpayer-husband (H)
owned and operated a retail store as a sole proprietorship in
Ventura, California, and another retail store as a partnership
with his brother in Santa Barbara, California. See id. at 757.
H’s interests in the Ventura store and the Santa Barbara
partnership constituted community property. See id. at 758-759,
768. H and W filed separate tax returns for 1943. See id. at
757. The Santa Barbara partnership filed a partnership
information return for 1943. See id. at 758, 768. The Ventura
store filed a partnership information return for 1943, at the
suggestion of a revenue agent, in order to facilitate the
reporting of H’s and W’s community income derived from that
store. See id. at 758-759, 769. If H and W were treated as
having stated in their tax returns their shares of the gross
income of the Ventura store, then the denominators of their
section 275(c) fractions were more than four times the gross
income that the Commissioner determined H and W omitted, the
regular 3-year statute of limitations applied, and the notices of
deficiency for 1943 were untimely. See Rose v. Commissioner, 24
T.C. at 760, 766-770. We analyzed the situation as follows (id.
at 768-769):
11(...continued)
partner.
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