Kathy A. King - Page 1

                                   116 T.C. No. 16                                    

                               UNITED STATES TAX COURT                                

                            KATHY A. KING, Petitioner AND                             
                          CURTIS T. FREEMAN, Intervenor v.                            
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 5989-97.                    Filed April 10, 2001.           

                    P claimed relief from joint liability under sec.                  
               6013(e), I.R.C., which was repealed and replaced by                    
               sec. 6015, I.R.C.  Intervenor (I) is P’s former spouse,                
               who intervened pursuant to sec. 6015(e)(4), I.R.C., in                 
               opposition to P’s claim for relief.  See King v.                       
               Commissioner, 115 T.C. 118 (2000).  P and I filed a                    
               joint income tax return for 1993, on which they claimed                
               a loss from a cattle-raising activity conducted by I.                  
               The loss was disallowed by R on the ground that the                    
               activity was not engaged in for profit under sec.                      
               183(a), I.R.C.                                                         
                    1.  Held:  P meets all the requirements for relief                
               under sec. 6015(c), I.R.C., unless R demonstrates that                 
               P had actual knowledge of the item giving rise to the                  
               deficiency at the time she signed the return.  See sec.                
               6015(c)(3)(C), I.R.C.  When the item giving rise to the                
               deficiency is a disallowed deduction, such knowledge                   
               must include knowledge of the factual circumstances                    

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