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the divorce decree addressed the sale of the Happy Valley
property.
In addition to providing to petitioner and Mr. Walker
separate 25-percent interests in the Happy Valley property, the
marital settlement agreement divided the rest of their real
property and their personal property, contained a provision for
an equalizing money judgment that required Mr. Walker to pay to
petitioner $500,000, and required Mr. Walker to pay to petitioner
spousal support in the amount of $4,000 per month until he
satisfied the equalizing money judgment. The equalizing money
judgment provided that “No interest shall accrue on the $500,000
judgment if paid within one year. If the judgment is not paid
when due, the judgment shall accrue interest at the rate of
9 percent per annum from the date the judgment is entered.”
Petitioner’s equalizing money judgment against Mr. Walker was
secured by a note and a trust deed on several pieces of real
property that were conveyed to Mr. Walker pursuant to the marital
settlement agreement, including his 25-percent interest in the
Happy Valley property. The equalizing money judgment was entered
against Mr. Walker on November 20, 1996.
Correspondence Regarding the Tax Consequences of Transactions
Involving the Happy Valley Property
On April 21, 1997, petitioner’s divorce attorney, Raymond
Young (Young), wrote a letter to Gary Leavitt (Leavitt), an
accountant in Oregon City, Oregon, requesting advice on a
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Last modified: May 25, 2011