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The Ventura store was not operated by a partnership.
It was community property of the petitioners and the income
therefrom was community income. Each of the petitioners,
therefore, should have reported one-half of the gross income
from the business. Leslie A. Sutor, 17 T.C. 64, 67. The
respondent urges that they did not do so in their individual
returns, and that their failure to do so is an omission from
gross income by each of them. But we think it is
unrealistic to say that the petitioners did not report the
gross income of the Ventura store (with the exception of the
$17,946.97 which each of them omitted). They did so on Form
1065, a “partnership return.” Although there was no
partnership between them in the business of this store, Form
1065 returns were filed for the years 1938 to 1948,
inclusive, at the suggestion of a revenue agent to
facilitate the reporting of the community income of the
store. The so-called partnership return filed for 1943
reported the gross income of the Ventura store in which
petitioners each had an equal interest. It was not the
return of another taxable entity. Cf. Corrigan v.
Commissioner, 155 F.2d 164, 166 (C.A. 6); Elvina Ratto, 20
T.C. 785, 789. It showed income of the community, a
nontaxable entity. In the circumstances we think that the
so-called partnership return filed for the Ventura store was
merely an adjunct to the individual returns of Jack and Mae
Rose and must be considered together with such individual
returns and treated as part of them. This case is thus
distinguished from the Switzer case where the return in
question was a proper partnership return, whereas here it
was nothing unless it was an adjunct to the individual
returns. But if the Commissioner is now and henceforth to
concede, contrary to our decision in the Switzer case, that
a valid partnership return may be read with the return of an
individual partner to arrive at the total gross income
stated in the partner’s return, then, a fortiori, the Form
1065 return in this case which was filed merely to
facilitate the reporting of community income of the
petitioners, similar returns having been accepted for a
number of years for that purpose by the Commissioner, would
have to be read together with the individual returns of the
partners to ascertain how much gross income was reported by
each of them. Cf. Germantown Trust Co. v. Commissioner, 309
U.S. 304; Atlas Oil & Refining Corporation, 22 T.C. 552,
557. We hold, therefore, that one-half of the gross income
appearing on the Ventura store “partnership” return must be
imputed to the individual return filed by each petitioner in
determining the total gross income stated therein for the
purposes of section 275(c). [Emphasis added.]
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