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allocable to the taxpayer as provided in section 6015(d). Sec.
6015(c)(1). Under section 6015(d)(3)(A), generally, any items
that give rise to a deficiency on a joint return, e.g., the
unreported early distributions from the Dean Witter account,
shall be allocated to the individual filing the return in the
same manner as it would have been allocated if the individual had
filed a separate return for the taxable year.
A taxpayer is eligible to elect the application of section
6015(c) if, at the time the election is filed, the taxpayer is
legally separated from the individual with whom the taxpayer
filed the joint return to which the election relates. Sec.
6015(c)(3)(A)(i)(I). Furthermore, the election under section
6015(c) must not be made later than 2 years after the date on
which respondent has begun collection activities with respect to
the taxpayer making the election. Sec. 6015(c)(3)(B).
Respondent does not contend that petitioner’s election under
section 6015(c) was untimely. Therefore, petitioner is eligible
to elect the application of section 6015(c) to limit her
liability for the 1999 tax deficiency.
The issue with which we are faced in this case, however,
deals with the application of section 6015(c)(4) to the transfer
of assets from Mr. Ohrman to petitioner pursuant to the
separation agreement. Specifically, we must decide whether the
amount of the 1999 tax deficiency for which petitioner can be
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