whose responsibility it was to pay the capital gains tax on the appreciation in Mollie's one-third interest in the VAY assets upon liquidation.  In their federal tax returns, neither Vincent nor Mollie reported the capital gain in dispute, each with a view that it was the responsibility of the other.


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The Tax Court held that Mollie did not receive an ownership interest in the VAY assets and was not liable for the capital gains tax attributable to her interest.   Yonadi v. Commissioner, 64 T.C.M.  (CCH) 1052, 1054 (1992).  The Tax Court appeared to characterize Mollie's interest as an "award of a payment of money contingent as to time and amount."   Id. at 1055.  According to the Tax Court, the statements madeagreement between Vincent and Mollie contemplated an ownership interest for Mollie.  The VAY assets were the primary marital assets of the former couple.  The record reflected that Vincent made a larger contribution to the acquisition and improvement of these assets than Mollie.  The judgment made under the equitable distribution powers of the New Jersey state court was intended to recognize the different contributions of the former spouses and thus contemplated granting a two-thirds interest to Vincent and a one-third interest to Mollie.  If we were to determine that Mollie received no ownership interest, and thus shoulders no tax liability, she would receive approximately 42% of the after-tax proceeds, while Vincent would receive only approximately 58%.  See Brief for Vincent and Nancy Yonadi at