                        T.C. Memo. 2000-37



                     UNITED STATES TAX COURT


             JAMES MESS AND JANET MESS, Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent


     Docket No. 20371-98.           Filed February 7, 2000.


     Alan R. Herson, for petitioners.

     Robert V. Boeshaar, for respondent.


                        MEMORANDUM OPINION

     POWELL, Special Trial Judge:   Respondent determined a

deficiency in petitioners’ 1996 Federal income tax in the amount

of $847.

     The issue is whether amounts petitioner Janet Mess

(petitioner) received from her former husband's military

retirement pension during 1996 are includable in gross income
                                - 2 -

under section 61.1   Petitioners resided in Talent, Oregon, at the

time the petition was filed.

     This case was submitted fully stipulated under Rule 122, and

the facts may be summarized as follows.    Prior to 1978 petitioner

was married to Jack Wright.    In 1978, they were divorced by a

final judgment entered by the Superior Court of California,

County of Santa Clara.   At that time, Mr. Wright was entitled to

and was receiving retirement pay from the U.S. Navy.    Under the

laws of California, petitioner had a community property interest

in Mr. Wright’s retirement pay.    Under the property settlement

incorporated into the final judgment the parties waived “any and

all claim[s] to past, present and/or future spousal support”.

With regard to Mr. Wright’s retirement pay, the agreement

provided:

     [Mr. Wright] currently being in receipt of retirement pay
     from the United States Navy shall pay to Petitioner on a
     monthly basis an amount equal to 43% of the net amount
     received by him, or in the event that it is possible
     considering the tax ramifications, said 43% shall be 43% of
     the gross received by him if he is not in fact taxed upon
     said 43%.

In October 1983, the Department of the Navy began directly paying

petitioner 43 percent of Mr. Wright’s retirement pay.

     During 1996 petitioner received $5,676 from the Department

of the Navy.   Petitioners did not include in gross income the


1
     Section references are to the Internal Revenue Code in
effect for the year in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure.
                                 - 3 -

$5,676 on their 1996 joint Federal income tax return.    Upon

examination, respondent determined that the $5,676 was taxable

income.

                              Discussion

     Section 61(a) defines gross income to include “all income

from whatever source derived, including (but not limited to) the

following items: * * * (11) Pensions”.     Military retirement pay

is a pension.     See Eatinger v. Commissioner, T.C. Memo. 1990-310.

The pension payments that petitioner received were made pursuant

to her community property interest in the military retirement

pension of her former husband.    Petitioner, however, argues that,

if as originally set forth in the final judgment, her former

husband had received retirement payments and she had received the

payments from him, the amounts would not be taxable to her.      But

that is exactly the situation in Eatinger v. Commissioner, supra,

where this Court held, on facts substantially identical to those

here, that under California law a former spouse had a property

interest in the former husband’s military pension and, therefore,

under section 61 the receipt of the military pension was taxable

to her even though it was received through the former husband.

The question is, under the applicable California law, to whom the

income belongs.    The answer here, as in Eatinger, is that it

belonged to the former wife, petitioner.    See also Graham v.
                              - 4 -

Commissioner, T.C. Memo. 1996-512; Porter v. Commissioner, T.C.

Memo. 1996-475.2

                                           Decision will be entered

                                      for respondent.




2
     Petitioner argues that the burden of proof is on respondent.
See sec. 6201(d). The resolution of this case does not depend on
which party has the burden of proof.
