- 27 -
the financial gain, the electing spouse may still qualify for
relief under section 6015(c). Id. With those principles in
mind, we now consider whether petitioner had actual knowledge of
the omitted capital gains income.
i. Lots 22 and 27
With respect to Lots 22 and 27, petitioner testified that
she was aware that the property was sold to Harry and Shelby
Justice in 1987. Petitioner signed the settlement statement for
the property and endorsed the check representing the proceeds
from the sale. However, the evidence in the record supports
petitioner’s claim that she did not know the actual amount of
gain on the sale. Petitioner testified that she simply signed
loan and deed documents and nobody explained them to her. She
testified she did not see any type of financial statements at the
closing of any real estate, and she did not have access to any
statements or documents identifying the amount of interest paid
on any mortgages.14
The testimony of petitioner and Mr. Rowe reflects that when
petitioners filed their Federal income tax returns for the years
in issue, petitioner was given the first two pages only of the
tax returns when signing the returns, and she was not afforded
the opportunity to see or review any attachments, schedules, or
14We note that the settlement statement does not identify
petitioners’ basis in the property at the time of sale.
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