Shuang-Di Sun Bennett - Page 19

                                       - 18 -                                         
          do not fit one of the other categories of section 879(a), and are           
          also classified as “other such community income”.                           
               Other such community income is treated under the applicable            
          community property law.  Therefore, the half of the $34,288 of              
          community income reported on petitioner’s return, or $17,144,               
          cannot be treated as Mr. Bennett’s income, and she is not                   
          entitled to further relief under section 66(c)(2).                          
               B. The Items of Community Income From Mr. Bennett’s Return             
                  Fail To Satisfy Section 66(c)(3)                                    
               Section 66(c)(3) provides that petitioner must establish               
          that she did not know, and had no reason to know, of the                    
          community income.  With regard to the items of community income             
          reflected on Mr. Bennett’s return ($40,054 of wages, $4,834 of              
          taxable interest, and $12,250 of other income), petitioner does             
          not satisfy section 66(c)(3).                                               
               A taxpayer’s knowledge of an item of community income must             
          be determined with reference to her knowledge of the particular             
          income-producing activity.  See McGee v. Commissioner, 979 F.2d             
          66, 70 (5th Cir. 1992), affg. T.C. Memo. 1991-510; Hardy v.                 
          Commissioner, T.C. Memo. 1997-97, affd. 181 F.3d 1002 (9th Cir.             
          1999).  Petitioner was aware that Mr. Bennett was employed by               
          Premium Fresh Juice and was aware that his wages were used to pay           
          their household living expenses.  While petitioner may not have             
          known the precise amount of Mr. Bennett’s salary, she had                   
          knowledge of his employment.  Accordingly, we find that                     

Page:  Previous  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  Next

Last modified: May 25, 2011