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DECISIONS FAMILY LAW where a shareholder spouse has no control over the disbursement of funds from an accumulated adjustment account used by a subchapter S corporation, the account is not marital property, the Minnesota Supreme Court held on July 17. In re Marriage of Gottsacker v. Gottsacker, No. C1-02-615. Such accounts, or “AAAs,” are used as a tool for recording each shareholders’ taxed but undistributed interests. Upon the husband’s petition for dissolution of marriage, a decree was entered, which said that his ex-wife’s interest in an AAA in their subchapter S corporation was nonmarital property; that he was not entitled to reimbursement for taxes she paid on the S corporation’s interest during the marriage; and that her ownership interest in another closelyheld corporation, which she bought with distributions from the S corporation, was marital property. After an intermediate appellate court affirmed, both parties appealed. Affirming, the state Supreme Court held that whether the AAA is marital property depends on the control that the shareholder spouse has over disbursement. Here, the wife acquired and owned an interest in the company before and during the marriage, but had no control over AAA distribution. Contin-uing, the court said that if interest in a nonmarital asset is classified as “appreciation,” it too is nonmarital unless it is “active appreciation,” resulting from marital effort, which was not the case here. Finally, the court said that the husband was not entitled to reimbursement on taxes paid on the AAA interest where his only proof was an unnotarized affidavit and a copy of one tax return.

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