A separated couple lived in a community property state. The wife claimed she was entitled to a portion of her husband’s interest in a partnership that he funded in part with community property assets. In the subsequent divorce settlement, she was awarded a stake in the partnership. Her ex then filed an amended return for an earlier year of the business and sent her a K-1 for her share of the firm’s income.
The Tax Court said she’s taxed on that income, since state law gave her an interest in the community property portion of that income (Carrino, TC Memo. 2014-34).