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party on behalf of the payee spouse pursuant to the terms of the
divorce or separation instrument qualifies as alimony or a
separate maintenance payment.
Burley argues that the only logical way for him to satisfy
the obligations in issue was by making cash payments to third
parties. Respondent agrees that the Agreement "necessarily
authorized cash payments to third parties to effect its
provisions." Alexandra argues that the pertinent provisions of
the Agreement do not expressly provide for Burley to make any
cash payments to her or on her behalf.
Clearly, the cash payments in issue meet the conditions
under which cash payments to a third party may satisfy section
71(b)(1)(A). First, we find that the cash payments were made
"under" the Agreement. Burley would not have caused the
dealership to make the cash payments but for the terms of the
Agreement. Second, we find that the cash payments were made "on
behalf of" Alexandra because they were made with respect to
property and services used solely by Alexandra. Third, we find
that the cash payments were not made to maintain property owned
by Burley. He had no ownership interest in the leased automobile
or in the medical insurance policy. Cf. sec. 1.71-1T(b), Q&A6,
Temporary Income Tax Regs., 49 Fed. Reg. 34455 (Aug. 31, 1984).
Section 71(b)(1)(B)
Alexandra argues that the payments made with respect to the
automobile do not satisfy section 71(b)(1)(B) because the parties
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