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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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