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income from the retiree’s employer. Eatinger v. Commissioner,
supra. The pension distributions that petitioner received
directly from DFAS represent a division of a military pension.
If we were to assume, arguendo, that the division of the
military pension effected a transfer of property to petitioner
subject to section 1041, petitioner has no basis in such
property, and thus the full amount of the pension distribution to
her is includable in her income. Sec. 1041(b).
The case at hand can be distinguished from Balding v.
Commissioner, 98 T.C. 368 (1992), in which this Court determined
that payments to the taxpayer, a former spouse of a retired
military serviceman, were transfers incident to a divorce under
section 1041, and income was not recognized by the taxpayer. In
Balding, the taxpayer received cash payments directly from her
former spouse in consideration of her agreement to relinquish all
claims to the former spouse’s military retirement pay. Id. at
369. The Court viewed the taxpayer’s release of rights to the
military retirement pay in exchange for the settlement payments
as a transfer of property. Id. at 373.
Petitioner, in contrast, received distributions from the
DFAS as a result of her retained ownership interest in her former
spouse’s military pension. Sec. 61(a)(11). We conclude that the
distributions to petitioner in 1998 from the military pension are
includable in her gross income. See Eatinger v. Commissioner,
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