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signs her name “Donna L. Rowe”, not “Donna Rowe”. Mr. Rowe
testified that he signed petitioner’s name on different
documents, and he supposed he might have done so on a settlement
statement. Although Mr. Rowe initially testified that he did not
sign petitioner’s name on the settlement statement or the check
for the Anorada property, he then testified that “there’s no
telling what I might have done.”
Petitioner’s testimony that she was unaware of the sale of
the Anorada property was credible and persuasive. Mr. Rowe’s
testimony regarding whether he signed petitioner’s name on the
settlement statement and check was unclear. Indeed, Mr. Rowe
admitted that he had signed petitioner’s name in the past without
her knowledge and that he generally did not provide her with
information regarding real estate transactions. Overall, we find
that respondent has not satisfied his burden of proving that
petitioner had actual knowledge of this item giving rise to a
deficiency. Accordingly, we hold that petitioner is entitled to
relief from joint liability under section 6015(c) for the portion
of this item allocable to Mr. Rowe.
III. Mortgage Interest
A. Background
In May 1987, petitioners sold Lots 22 and 27 and purchased
two adjoining 5-acre lots (Albritton property) across the street
from Lots 22 and 27. One lot was fenced and on it were a horse
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