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* * * Essentially, Pfister argues that because
“disposable retired pay,” by definition, is calculated
after taxes are withheld, it should not be taxed upon
payment to the retiree’s spouse or former spouse.
Implicit in that argument is Pfister’s contention that
she is not the owner of one-half of her former hus-
band’s retirement pay. Therefore, the issue becomes
whether Pfister owns her portion of her ex-husband’s
retirement pay.
We hold that Pfister is the owner of one-half of
her former husband’s retirement pay, and she is there-
fore liable to pay the * * * income tax deficiency.
* * *
* * * * * * *
It is well established that military retirement
payments “are gross income to the party who owns the
right to those payments pursuant to the division of
property in a divorce.” Moreover, as the Tax Court
noted, “[i]t is axiomatic in Federal tax law that
income is taxable to the legal owner of the * * *
property producing the income.” Pfister provides no
theory on which to contradict this conclusion. Accord-
ingly, we conclude that the Tax Court properly deemed
Pfister to be the owner of one-half of her former
husband’s military retirement pay. [Citations omit-
ted.]
Pfister v. Commissioner, supra at 353-355.
We conclude that the holding of the Court of Appeals and its
rationale underlying that holding in Pfister v. Commissioner, 359
F.3d 352, which were based upon this Court’s holding and its
rationale underlying that holding in Pfister v. Commissioner,
T.C. Memo. 2002-198, are controlling in the instant case. On the
record before us, we find that, pursuant to petitioner’s divorce
decree and petitioner’s property settlement agreement, petitioner
is the owner of 50 percent of Mr. Seaman’s disposable retired
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