- 8 - Marriage of Brown, 544 P.2d 561, 563 (Cal. 1976). Accordingly, where California law applies, each spouse has a one-half interest in military retirement benefits earned during marriage. As a general rule, the Internal Revenue Code imposes a tax on the taxable income of every individual. See sec. 1. For purposes of calculating taxable income, section 61 defines gross income as “all income from whatever source derived” unless otherwise specifically excluded. Sec. 61. Gross income specifically includes amounts derived from pensions. Sec. 61(a)(11). Military retired pay constitutes a pension within the meaning of that section. See Eatinger v. Commissioner, supra (“A military retirement pension, like other pensions, is simply a right to receive a future income stream from the retiree’s employer.”); sec. 1.61-2(a)(1), Income Tax Regs.; sec. 1.61- 11(a), Income Tax Regs. (“Pensions and retirement allowances paid either by the Government or by private persons constitute gross income unless excluded by law.”); see also 31 U.S.C. sec. 9502(1)(B)(x) (1994) (“Military Retirement System” is a Government pension plan); 10 U.S.C. 1461(a) (2000) (defining the Department of Defense Military Retirement Fund). Petitioners do not dispute that the superior court awarded petitioner a community property interest in Mr. Walton’s military retired pay, and that petitioner received in 2000 total payments of $4,958, with zero Federal income tax withheld, from DFAS forPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
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