West

The question here is whether or not the petitioning taxpayer was entitled to report his income for the year 1937 on the community property basis. The Board of Tax Appeals held that he was not.

Taxpayer married Felita M. West in 1920. In the ensuing years he acquired property consisting largely of stock in an importing concern. The couple at all times were domiciled in the State of Washington, and the property acquired was community property. In the year 1937 taxpayer was general manager of the corporation mentioned and received from it a salary of about $33,000. During the same year the corporation paid him a substantial sum as interest on loans, and he received dividends on his stock in the amount of $32,400.

Prior to that year the Wests had become involved in domestic difficulties due to the wife’s excessive drinking. In 1935 taxpayer obtained a divorce in an action brought in the superior court of King County, Washington. The decree became absolute in October 1935. In contemplation of the divorce the Wests entered into a “settlement agreement” which provided, among other things, for the payment by taxpayer of $80 per month as alimony and for the procurement by him of a policy…