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uncollectible.
Section X.C of the Separation Agreement also provides, in
part:
The parties stipulate and agree that Calvin Shearin,
the Certified Public Accountant of the parties during
their marriage, shall determine a proportional allocation
of principal and interest, which is attributable to the
payment which Husband and Wife receive from time to time
so that the parties can properly report such receipts on
their respective income tax returns.
Petitioner received payments totaling $21,000 in each of the
years 1995, 1996, and 1997 pursuant to section X.C of the
Separation Agreement. Mr. Calvin Shearin (Mr. Shearin) testified
that he made the allocations of principal and interest for Dr.
Capps and petitioner in accordance with the Separation Agreement.
Petitioner reported the following amounts of interest income on
her respective Federal income tax returns:
Year Interest Income Reported
1995 $9,992
1996 8,960
1997 7,732
On April 11, 1997, petitioner filed a Form 1040X, Amended
U.S. Individual Income Tax Return, for 1995 to claim a refund of
the 1995 taxes paid on capital gain income of $11,006, which had
been allocated under the Separation Agreement.
Petitioner contends that she is not liable for any capital
gain income associated with the receipt of the $1,750 monthly
payments for the years in issue. Additionally, petitioner
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