- 8 - 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,Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
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