Appeals Court Finds Ex-Wife Owes Tax on Shared Business Income

A federal appeals court on Monday affirmed a US Tax Court ruling that a woman was an active member of a real estate business shared with her late ex-husband and is therefore responsible for some of its associated tax liabilities.

Karen Veeraswamy was a half-owner of Ashand Enterprises, a now-bankrupt real estate business she founded with her former husband, and is on the hook for its tax liabilities, the US Court of Appeals for the Second Circuit held.

The government tried to collect tax from Veeraswamy as part of Ashand’s bankruptcy proceedings because she was the business’ 50% owner, ...