- 8 -
Commissioner, 338 F.2d 602, 605 (9th Cir. 1964), affg. 41 T.C.
593 (1964). We found petitioners’ testimony on this issue to be
general, vague, conclusory, and/or questionable in certain
material respects. Under the circumstances presented here, we
are not required to, and do not, rely on petitioners’ testimony
to establish whether Ms. Yeager was insolvent. Lerch v.
Commissioner, 877 F.2d 624, 631-632 (7th Cir. 1989), affg. T.C.
Memo. 1987-295; Geiger v. Commissioner, 440 F.2d 688, 689-690
(9th Cir. 1971), affg. per curiam T.C. Memo. 1969-159; Tokarski
v. Commissioner, 87 T.C. 74, 77 (1986). Accordingly, we conclude
that at the time of the discharge of indebtedness Ms. Yeager was
not entitled to the benefits provided by section 108(a)(1)(B).
E. Mr. Rinehart’s Liability Regarding the Canceled Debt
In the notice of deficiency issued to Mr. Rinehart for 1995,
respondent determined “in accordance with community property
laws” that Mr. Rinehart was liable for $10,987 of COD income.
Petitioners claim that pursuant to Texas law Ms. Yeager’s COD
income was not income to Mr. Rinehart as the cancellation of
indebtedness related to Ms. Yeager’s separate property and did
not give rise to community income. Again, we need not decide
petitioners’ marital status for 1995 for Federal income tax
purposes because, although respondent made an adjustment in Mr.
Rinehart’s separate notice of deficiency for 1995 regarding Ms.
Yeager’s COD income, in his briefs respondent did not address the
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