Johnson v. Commissioner

• Decision Date: 15 January 1980
• Docket Number: Docket No. 273-78.
• Citation: 1980 TC Memo 9,39 TCM (CCH) 868
• Parties: Arthur J. Johnson v. Commissioner.
• Court: U.S. Tax Court

39 TCM (CCH) 868

1980 TC Memo 9

T.C. Memo. 1980-9.

Arthur J. Johnson v. Commissioner.

Docket No. 273-78.

United States Tax Court.

Filed January 15, 1980.

Arthur J. Johnson, pro se, 41 Hazelton Circle, Briarcliff Manor, N.Y. William F. Halley, for the respondent.

Memorandum Findings of Fact and Opinion

DAWSON, Judge:

This case was assigned to and heard by Special Trial Judge Francis J. Cantrel pursuant to section 7456(c) of the Internal Revenue Code¹ and General Order No. 6 of this Court, 69 T.C. XV.² The Court agrees with and adopts his opinion which is set forth below.

Opinion of the Special Trial Judge

CANTREL, Special Trial Judge:

Respondent determined a deficiency in petitioner's Federal income tax for 1975 in the amount of $741.38.

The issues for determination are (1) whether petitioner is entitled to a deduction for claimed charitable contributions under section 170; (2) whether petitioner is qualified to file as head of household under section 2(b); and (3) whether petitioner is entitled to a deduction for mortgage interest and real estate taxes paid by his estranged spouse on real property solely owned by such spouse under sections 163 and 164.

Findings of Fact

Many of the facts were stipulated and are found accordingly.

Petitioner's legal residence was 41 Hazelton Circle, Briarcliff Manor, New York, at the time he timely filed his 1975 individual Federal income tax return with the Internal Revenue Service.

Petitioner and his former wife Barbara Johnson (Barbara) were legally separated pursuant to a written separation agreement dated October 19, 1974. They were thereafter divorced on March 30, 1976, pursuant to a Decree of Divorce issued by the Supreme Court of New York. Four children were born of their marriage: Ellen, born July 3, 1954; Patricia, born September 25, 1955; Kathleen, born March 14, 1961; and Arthur, Jr., born January 25, 1962. Under the separation agreement custody of the children was given to Barbara.

Sometime prior to 1975 petitioner and Barbara purchased a house at 41 Hazelton Circle, Briarcliff Manor, New York. Title to this house was placed solely in Barbara's name. At the time of purchasing the house, petitioner signed an agreement with the bank holding the mortgage; under the terms of this agreement he guaranteed the payment of principal and interest on the mortgage and the taxes on the house in the event that Barbara failed to make such payments. During 1975 Barbara resided at 41 Hazelton Circle with the two youngest children. Petitioner did not reside at 41 Hazelton Circle during 1975. Although he resided at several locations for short periods during 1975, he resided primarily at 1563 Lurting Avenue, Bronx, New York, in a single-family dwelling owned by his mother.

During the entire year 1975 petitioner's eldest daughter Ellen attended Williams College in Massachusetts as a full-time student and maintained a room or apartment in Massachusetts. During the entire year 1975 petitioner's daughter Patricia was a full-time student at Skidmore College, Saratoga, New York, and at the University of Virginia and maintained a room or apartment at those respective locations.³ During 1975 Ellen and Patricia did not reside with petitioner in his residence for any portion of the year. Upon receiving their college degrees, neither daughter returned to reside with petitioner.

During 1975 petitioner paid a total of $11,700, by check made payable to Barbara. He also gave Barbara money in excess of the amount ordered by the written separation agreement. Barbara used funds received from petitioner to pay the real estate taxes and mortgage payments on the residence at 41 Hazelton Circle directly to the bank in the following amounts:

                  Real property taxes ..............  $2,223.83
                  Mortgage interest ................   2,574.24
                

Petitioner was not obliged under the separation agreement to pay real estate taxes and mortgage payments on the residence at 41 Hazelton Circle and he did not make any such payments to the bank during 1975.

Petitioner attended services at St. Theresa's Roman Catholic Church every Sunday while visiting his children. Every week he gave a cash contribution to St. Theresa's, and he deducted $520 for charitable contributions on his 1975 return. Respondent disallowed the claimed charitable contributions to St. Theresa in their entirety because petitioner produced no documentary evidence to substantiate them.

Petitioner claimed all four of his children as dependency exemptions on his 1975 income tax return and claimed unmarried head of household filing status. Respondent allowed the dependency exemptions and disallowed the unmarried head of household filing status in his notice of deficiency. Petitioner claimed deductions on his 1975 return for interest expenses and state and local income taxes in the amounts of $910 and $3,074, respectively. Respondent allowed deductions for interest expenses and state and local income taxes in the amounts of $676.11 (a disallowance of $233.89)⁴ and $3,470.43 (a credit of $396.43), respectively, in his notice of deficiency. Petitioner claims that he is entitled to an additional deduction not claimed on his 1975 return for mortgage interest and real estate taxes paid on the residence at 41 Hazelton Circle.⁵

Opinion

First, we address whether petitioner is entitled to a charitable contribution deduction under section 170. Petitioner regularly attended St. Theresa's each week during 1975 and made cash contributions which he claims totalled $520. However, he failed to substantiate his alleged contributions as he should have. See section 1.170A-1(a)(2), Income Tax Regs. Nevertheless, petitioner's testimony was candid, forthright, and credible, and we are convinced that he regularly attended and made cash contributions to St. Theresa's throughout 1975.⁶ Using our best judgment and bearing heavily against petitioner whose inexactitude is of his own making, we hold that petitioner is entitled to a $260 charitable contribution deduction. Cohan v. Commissioner 2 USTC ¶ 489, 39 F. 2d 540 (2d Cir. 1930); see Lamphere v. Commissioner Dec. 35,183, 70 T.C. 391, 394 (1978); Mennuto v. Commissioner Dec. 30,905, 56 T.C. 910, 923-924 (1971).

Next, we consider the issue of petitioner's filing status. Section 1(b) imposes a tax in accordance with the rate schedule provided therein on the taxable income of every individual who is the head of a household (as defined in section 2(b)). Head of household is defined in section 2(b), which reads in its entirety, as follows:

2(b) Definition of Head of Household. —

(1) In General. — For purposes of this subtitle, an individual shall be considered a head of a household if, and only if, such individual is not married at the close of his taxable year, is not a surviving spouse (as defined in subsection (a) ), and either — (A) maintains as his home a household which constitutes for such taxable year the principal place of abode, as a member of such household, of —

(i) a son, stepson, daughter, or stepdaughter of the taxpayer, or a descendant of a son or daughter of the taxpayer, but if such son, stepson, daughter, stepdaughter, or descendant is married at the close of the taxpayer's taxable year, only if the taxpayer is entitled to a deduction for the taxable year for such person under section 151, or

(ii) any other person who is a dependent of the taxpayer, if the taxpayer is entitled to a deduction for the taxable year for such person under section 151, or

(B) maintains a household which constitutes for such taxable year the principal place of abode of the father or mother of the taxpayer, if the taxpayer is entitled to a deduction for the taxable year for such father or mother under section 151.

For purposes of this paragraph, an individual shall be considered as maintaining a household only if over half of the cost of maintaining the household during the taxable year is furnished by such individual. (Emphasis added.)

Respondent contends that petitioner has not shown that he was not married at the end of 1975 and further that petitioner did not maintain as his home a household which constituted the principal place of abode of any of his children. We agree. Section 2(b)(2)(B) provides that for the purposes of section 2(b) a person "who is legally separated from his spouse under a decree of divorce or of separate maintenance shall not be considered as married." It is well established that for the purposes of the tax laws, whether an individual is "married" is to be determined by the law of the state of the marital domicile. Dunn v. Commissioner Dec. 35,176, 70 T.C. 361 (1978); Deyoe v. Commissioner Dec. 34,000, 66 T.C. 904, 913 (1976); Eccles v. Commissioner Dec. 19,508, 19 T.C. 1049, 1051 (1953), affd. per curiam 54-1 USTC ¶ 9129 208 F. 2d 796 (4th Cir. 1953). Actual or voluntary separation pursuant to a written separation agreement does not satisfy the requirements of section 2(b); a decree of divorce or of separate maintenance is necessary. Kellner v. Commissioner 72-1 USTC ¶ 9741, 468 F. 2d 627 (2d Cir. 1972), affirming per curiam a Memorandum Opinion of this Court.⁷

The parties have stipulated that petitioner and Barbara "were legally separated pursuant to a written separation agreement dated October 19, 1974." No explanation of this written separation agreement was presented at trial, nor was a copy of the agreement entered into evidence. We are therefore unable to determine with exactitude whether petitioner was separated under a decree of separate maintenance. (The record as a whole dictates that he was not.) Nevertheless, section 2(c) provides that an individual shall be considered unmarried for the purposes of section 2(b) if the individual is considered unmarried under section 143(b). Section 143(b) treats certain married individuals living apart, as unmarried, for the purposes of determining head of household status if they are married but separated and file separate returns, and the...