Katherine A. Weir - Page 9




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          the Deficit Reduction Act of 1984, Pub. L. 98-369, 98 Stat. 793             
          (adding section 1041, generally effective for transfers after               
          July 18, 1984, but, in some cases, effective for transfers after            
          December 31, 1983).                                                         
               Law predating section 1041 establishes that, in the case of            
          an approximately equal division of community property on divorce,           
          no gain is recognized on the theory that no sale or exchange has            
          occurred but only a nontaxable partition, and the basis of the              
          property set aside for each spouse is its basis to the community            
          prior to the divorce.  See, e.g., Carrieres v. Commissioner, 64             
          T.C. 959, 964 (1975), affd. per curiam 552 F.2d 1350 (9th Cir.              
          1977).                                                                      
               Since we assume that there was here an approximately equal             
          division of the community property, petitioner recognized no gain           
          (or loss) on receipt of her separate property pension rights.  We           
          assume that the community’s, and her, basis in those rights was             
          zero.                                                                       
                    3.  Receipt of Payments                                           
               Petitioner had no basis in her separate property pension               
          rights.  Petitioner was taxable in full on receipt of the                   
          payments.  See sec. 61(a)(1); Eatinger v. Commissioner, supra.              
          It is of no moment that the payments were collected by the                  
          ex-husband.  See Mess v. Commissioner, T.C. Memo. 2000-37;                  
          Eatinger v. Commissioner, T.C. Memo. 1990-310.                              






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