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in computing disposable retired pay. 10 U.S.C. sec.
1408(a)(4)(C) (1988 & Supp. III 1991); NDAA sec. 555(b)(3),
(e)(2). This amendment, however, is effective only for divorces
entered into on or after February 3, 1991, which date is after
both petitioner’s final judgment and the QDRO and is therefore
not applicable in the instant case. 10 U.S.C. sec. 1408(a)(4)(C)
(1988 & Supp. III 1991); NDAA sec. 555(b)(3), (e)(2).
Based on the law as it was in effect on the date of
petitioner’s final judgment and the date of the QDRO,
petitioner’s interest is calculated on Mr. Walton’s military
retired pay less income taxes withheld. As explained earlier,
petitioner’s interest is taxable. Accordingly, we conclude that
the $4,958 received in 2000 by petitioner for her interest in Mr.
Walton’s military retired pay is includable in petitioners’ gross
income.
However unfair the outcome in this case may seem to
petitioners, the gap in the USFSPA that this case highlights is
not one that can be closed by judicial fiat, and a remedy, if
any, must originate with Congress.
We have considered all of petitioners’ arguments, and, to
the extent that we have not specifically addressed them, we
conclude them to be without merit.
Reviewed and adopted as the report of the Small Tax Case
Division.
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