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petitioner and Mr. Rowe. Petitioner admitted signing the
settlement statement for one of the properties and endorsing one
of the checks. Petitioner’s name was signed on the settlement
statement for the other property and on the other check; however,
petitioner disputed at trial that she had made these signatures.
The capital gains from the sales of the properties were not
reported on petitioner and Mr. Rowe’s 1987 and 1988 returns.
We agreed with respondent that the capital gains were
allocable evenly between petitioner and Mr. Rowe. However, we
rejected respondent’s argument that petitioner had actual
knowledge of the omitted income. We did so largely on the basis
of our finding that Mr. Rowe refused to allow petitioner to
review most of their tax return information and that,
consequently, she did not know of the sale of one of the
properties, the amounts of the gain on the sales, or that any
gains were made on the sales. We held that petitioner was
entitled to relief under section 6015(c) for the half of the
capital gains allocable to Mr. Rowe.
Respondent’s position that petitioner had actual knowledge
of the capital gains from the sales was based on the facts that
she was a joint owner of the properties and her signature was on
the settlement statements and the checks representing the
proceeds of the sales. On the basis of these facts and the
relevant legal precedent, we find that respondent had a
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