DocketNumber: Docket No. 11722-79
Citation Numbers: 42 T.C.M. 654, 1981 Tax Ct. Memo LEXIS 320, 1981 T.C. Memo. 427
Filed Date: 8/12/1981
Status: Non-Precedential
Modified Date: 11/20/2020
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MEMORANDUM FINDINGS OF FACT AND OPINION
WILES,
FINDINGS OF FACT
All of the facts have been stipulated and are found accordingly.
William Field Miller (hereinafter petitioner) resided in Canoga Park, California, when he filed his petition in this case. He filed his 1975 and 1976 Federal income tax returns with the Internal Revenue Service Centers at Philadelphia, Pennsylvania, and Fresno, California, respectively.
During 1975 and 1976, petitioner was a United States citizen and was domiciled in California. On June 17, 1972, petitioner married Maria A. Miller (hereinafter Mrs. *321 Miller), a citizen of Germany. Their marital domicile was California during the years in issue. From 1972 until early August 1976, petitioner resided in Belgium. On August 6, 1976, he became a resident of California and resided there for the remainder of the year.
During the period from January 1, 1975 to August 5, 1976, petitioner was an employee of Hughes Aircraft International Service Company (hereinafter Hughes). All amounts paid to petitioner by Hughes in 1975 and 1976 were community property. Petitioner retired from the United States Air Force in 1963. In 1975 and 1976, he received Air Force pension payments of $ 8,329.05 and $ 8,972.38, respectively. These payments were petitioner's separate property.
In 1975 and 1976, petitioner paid his former wife, Janet Ruth Warner, alimony of $ 5,500 and $ 6,000, respectively, pursuant to an order of the Superior Court of the State of California, dated May 5, 1972, as modified March 20, 1975. Petitioner's obligation to pay alimony was his separate debt.
On his 1975 and 1976 tax returns, petitioner claimed deductions for the alimony payments he made to his former wife. He also claimed deductions for the following expenses which*322 he had paid in those years.
1975 | 1976 | |
Taxes | $ 191 | $ 1,727.82 |
Interest | 600 | 6,578.84 |
Political Contributions | 75 | |
Charitable Contributions | 125.00 |
In the notice of deficiency, respondent disallowed one-half of each of the above deductions to reflect the community property division of petitioner's income.
OPINION
We must determine whether petitioner is entitled to deduct more than one-half of the amounts he paid for alimony and other miscellaneous expenses during the years in issue.
Respondent maintains that the alimony and other miscellaneous deductions must be equally divided between petitioner and Mrs. Miller unless he establishes that he used his separate funds to pay those expenses. Respondent asserts that petitioner failed to prove that he paid such expenses from his separate property and, therefore, is not entitled to deduct more than one-half of those expenses.
Petitioner, on the other hand, argues that he is entitled to deduct the full amount of the alimony he paid in 1975 and 1976. According to petitioner, since the obligation to pay alimony constitutes a separate debt, rather than a community debt, he was required by California*323 law to discharge that debt from his separate income before invading community income. Petitioner maintains that the use of community funds to make the alimony payments would have violated the fiduciary duty which he, as manager of the community, owed to Mrs. Miller because his separate income from the pension was sufficient to discharge that obligation in 1975 and 1976. Furthermore, petitioner asserts that even if such a violation occurred, a debt would automatically arise from his separate property to the community. Therefore, as a matter of law, the alimony payments would have been made from his separate funds because the community funds would be deemed to have been loaned to his separate property.
In addition, although petitioner concedes that the other expenses in issue constitute community expenses, he argues that his separate income was pooled with his community income to pay such expenses, and, therefore, a ratable portion of those expenses should be considered to have been paid from his separate income. Thus, petitioner would be entitled to deduct such ratable portion in addition to one-half of the remaining amount of the expenses.
We must hold for respondent. In
We agree with respondent. The burden is an petitioner to disprove respondent's determination.
We cannot accept petitioner's theory that payment of alimony out of community funds would violate his fiduciary duty. The California cases which he cites state not that a debt arises at the time of payment but that, upon dissolution of the marriage, the wife is entitled to reimbursement for community funds used to improve the husband's separate property.
Indeed, under California law, the community is liable for the debts of the husband, including alimony, whether such debts are contracted before or after the marriage.
The Court's opinion in
To reflect the foregoing,