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268 (spouse benefited from receiving refund despite reinvestment
in Hoyt partnerships).
The determinative fact, however, is not that a refund was
received but who benefited from it. In particular, we have held
that, where a refund was used to benefit an electing spouse in a
manner beyond normal support or where an electing spouse chooses
to invest a refund in business activities, a significant benefit
was received. See Abelein v. Commissioner, T.C. Memo. 2004-274
(spouse and her husband reinvested portions of refund into a
business activity); Pierce v. Commissioner, T.C. Memo. 2003-188
(spouse used refund to contribute capital and lend funds to an
investment); French v. Commissioner, T.C. Memo. 1996-38 (spouse
used refund to jointly purchase several certificates of deposit
in large denominations); Schlosser v. Commissioner, T.C. Memo.
1992-233 (spouse used refund for investments and to pay off
debts), affd. without published opinion 2 F.3d 404 (11th Cir.
1993).
If, however, a tax refund is used only by a nonelecting
spouse for his or her own investment, the electing spouse would
not necessarily have received a significant benefit. See Hillman
v. Commissioner, T.C. Memo. 1993-151 (nonelecting spouse used
refund to buy himself a Porsche automobile and a Rolex watch and
to invest in a motion picture); Estate of Killian v.
Commissioner, T.C. Memo. 1987-365 (nonelecting spouse used refund
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