                        T.C. Memo. 2009-53



                      UNITED STATES TAX COURT



               DELYSIA B. GRONBECK, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 10750-07.               Filed March 11, 2009.



     John E. Lahart, for petitioner.

     Margaret Burow, for respondent.



                        MEMORANDUM OPINION

     SWIFT, Judge:   This matter is before us on respondent’s

motion for summary judgment under Rule 121.     Petitioner

challenges respondent’s denial of relief under section 6015(f)

from unpaid tax liabilities of $44,398 reported on a jointly

filed 2005 Federal income tax return.
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     Unless otherwise indicated, all section references are to

the Internal Revenue Code, and all Rule references are to the Tax

Court Rules of Practice and Procedure.


                             Background

     At the time the petition was filed, petitioner resided in

San Francisco, California.

     Petitioner and her husband, Christian Gronbeck, Jr.

(Christian), were married more than 50 years ago.    Christian was

a medical doctor and a partner in a medical practice in San

Rafael, California.   During their marriage petitioner was not

gainfully employed and was a homemaker and a mother of two

children.   On June 28, 2006, Christian passed away.

     In the 1970s Christian purchased a .1998-percent limited

partnership interest in Cedar-Riverside Properties (CRP), a

Minnesota limited partnership.    Petitioner was aware that

Christian purchased the interest in CRP.

     In 2003 Christian suffered a stroke and was admitted to a

residential medical facility.

     On December 24, 2003, along with other property interests,

Christian’s legal interest in CRP was transferred to petitioner

at petitioner’s and Christian’s request via an order of the

Superior Court of the State of California for the County of Santa

Barbara, Anacapa Division.   The purpose of the transfer of

property to petitioner was to qualify Christian for State and
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Federal medical benefits while allowing petitioner to control the

CRP and other property interests.

     On their jointly filed Federal income tax returns for many

years, petitioner and Christian reported losses relating to CRP.

     On April 13, 2004, after an audit of CRP respondent

determined that CRP constituted an improper tax shelter and that

the CRP losses the CRP partners, including petitioner and

Christian, had claimed over the years were improper.

     On March 30, 2006, respondent and CRP’s tax matters partner

reached an agreement to settle the tax adjustments relating to

CRP which respondent had determined.

     Under the settlement respondent and CRP’s tax matters

partner stipulated that for 2005 the individual CRP partners who

chose to participate in the settlement would recognize capital

gain in the form of a deemed distribution under section 752(b) to

the extent that each partner’s total claimed CRP-related tax

losses resulted in a negative capital account balance for the

partner’s CRP interest.   Under the settlement the individual CRP

partners would not have to pay statutory penalties and interest

relating to the CRP loss deductions they had claimed in prior

years, and the CRP partners would be taxed in 2005 at the capital

gains tax rates applicable for 2005, which were lower than the

capital gains tax rates applicable to many of the prior years.
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     Pursuant to and consistent with the above settlement, for

2005 petitioner and Christian filed a joint Federal income tax

return and reported thereon long-term capital gain of $247,011

relating to the CRP-related losses they had claimed in prior

years and to the deemed distribution under section 752(b) that

was called for in the above settlement.   The 2005 tax return

reported a tax liability of $61,210, of which $44,398 remains

unpaid.   Their 2005 income tax return was signed by Barbara

Allen, who was acting under a power of attorney for both

petitioner and Christian.

     On May 22, 2006, petitioner filed with respondent a request

for equitable relief under section 6015(f) relating to the

$44,398 unpaid tax liability.   In her request petitioner claimed

that she should be relieved of liability because she did not have

any involvement with CRP.   Petitioner also claimed that she could

not pay the unpaid tax liability.

     On September 15, 2006, respondent denied petitioner’s

section 6015(f) request.    Respondent concluded that the $44,398

unpaid tax liability for 2005 related to income attributable to

petitioner--namely, to the deemed distribution under section

752(b) which related to petitioner’s ownership in 2005 of the CRP

partnership interest.

     On October 18, 2006, petitioner filed an appeal with

respondent’s Appeals Office relating to respondent’s
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September 15, 2006, denial of section 6015(f) relief.   Petitioner

claimed that the unpaid tax liability did not arise from income

attributable to her but rather that it arose from Christian’s

ownership interest in CRP and the CRP-related losses claimed in

years before 2005.

     On May 3, 2007, respondent issued to petitioner a written

notice of determination denying petitioner’s request for section

6015(f) relief.   Respondent determined that for 2005 the unpaid

tax liability was attributable to petitioner because in 2005

petitioner was the owner of the CRP partnership interest.

Respondent also determined that petitioner failed to establish

that an economic hardship would result if she were held jointly

liable for the 2005 unpaid tax liability.


                             Discussion

     When no material fact remains at issue, we may grant summary

judgment as a matter of law.   Rule 121(b); Fla. Country Clubs,

Inc. v. Commissioner, 122 T.C. 73, 75-76 (2004), affd. on other

grounds 404 F.3d 1291 (11th Cir. 2005).

     Equitable relief from joint liability for Federal income

taxes may be available to a spouse when it would be inequitable

to hold the spouse liable.   Sec. 6015(f)(1).   Rev. Proc. 2003-61,

sec. 4.01, 2003–2 C.B. 296, 297, sets forth seven threshold

conditions which a taxpayer seeking equitable relief from joint

liability under section 6015(f) is required to satisfy.   One of
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the seven threshold conditions provides that the income must not

be “attributable to” the spouse seeking relief.   See id. sec.

4.01(7), 2003-2 C.B. at 297-298.1

     Rev. Proc. 2003-61, sec. 4.01(7)(b), states that: “If the

item is titled in the name of the requesting spouse, the item is

presumptively attributable to the requesting spouse.”

     Petitioner argues that the income in question is

attributable to Christian, and not to her, because Christian was

the sole owner of the CRP partnership interest during the years

when essentially all of the CRP partnership losses were claimed.

We disagree.

     In 2003 Christian transferred his interest in CRP to

petitioner so that he could qualify for medical benefits.   The

ownership interest was not forced upon petitioner; rather, it was

done voluntarily by Christian and by petitioner to take advantage

of State and Federal law.

     On the basis of the undisputed facts of this case

(specifically the transfer of the CRP partnership interest to



     1
        In describing, in part, the threshold condition in
question, Rev. Proc. 2003-61, sec. 4.01(7), 2003-2 C.B. 296, 297-
298 states: “The income tax liability from which the requesting
spouse seeks relief is attributable to an item of the [other]
individual with whom the requesting spouse filed the joint
return”. There are four exceptions to this procedure.
Petitioner, however, has not argued that any of these exceptions
applies. The exceptions are: (a) Attribution due solely to the
operation of community property law; (b) nominal ownership;
(c) misappropriation of funds; and (d) abuse. Id.
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petitioner for State and Federal law purposes), petitioner’s

legal ownership of the CRP partnership interest in 2005 requires

attribution of the $44,398 unpaid tax liability reported on

petitioner’s 2005 Federal income tax return to petitioner.

Petitioner is not eligible for relief under section 6015(f).

     For the reasons stated, we shall grant respondent’s motion

for summary judgment.


                                      An appropriate order and

                                decision will be entered for

                                respondent.
