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separate bank accounts. The bank accounts and interest income
were:
Harris Bank ARGO $1,201.00
Heritage Community Bank 1,086.00
Citibank F.S.B. 30.00
At trial, petitioner’s attorney during the marital
dissolution proceedings credibly testified that an escrow account
was opened that contained funds from both petitioner and Mr.
Nahhas. Ownership of the funds in the escrow account was
transferred to petitioner in 2003 under the December 15, 2003,
judgment for final dissolution. Petitioner confirmed that the
escrow account was located at the Harris Community Bank.
Petitioner, however, did not address the ownership of either the
Heritage or Citibank bank accounts in 2002.
It is a general rule of taxation that income is not
constructively received if a taxpayer’s control of its receipt is
subject to substantial limitations or restrictions. See sec.
1.451-2(a), Income Tax Regs. Moreover, it is well established
that “gross income” generally refers to assets over which the
taxpayer can exercise “dominion and control.” Ianniello v.
Commissioner, 98 T.C. 165, 173 (1992). Thus, when amounts are
deposited in an escrow account beyond that taxpayer’s reach, they
generally are not includable in his gross income. See, e.g.,
Reed v. Commissioner, 723 F.2d 138 (1st Cir. 1983) (no receipt
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