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and “substitute payment liability”, respectively (collectively,
“postdeath liability”).
2. Historical Context
Before we begin our analysis, some historical background
would be helpful. Prior to 1984, the Internal Revenue Code
described taxable alimony as “periodic payments (whether or not
made at regular intervals) received * * * in discharge of, or
attributable to property transferred (in trust or otherwise) in
discharge of, a legal obligation which, because of the marital or
family relationship, is imposed upon or incurred by” the payor
spouse under a divorce or separation instrument. Sec. 22(k),
I.R.C. 1939, as enacted by the Revenue Act of 1942, ch. 619, sec.
120(a), 56 Stat. 816 (the 1942 Act); see also sec. 71(a)(1) and
(2), I.R.C. 1954, prior to amendment by the Deficit Reduction Act
of 1984, Pub. L. 98-369, sec. 422(a), 98 Stat. 494 (the 1984 Act)
(similar language). The general rule of inclusion in the
recipient’s income did not apply to “that part of any such
periodic payment which the terms of the decree or written
instrument fix, in terms of an amount of money or a portion of
the payment, as a sum which is payable for the support of minor
children”. Sec. 22(k), I.R.C. 1939, supra; see also sec. 71(b),
I.R.C. 1954, supra (substantially identical language).
Furthermore, except as otherwise provided, “[i]nstallment
payments discharging a part of an obligation the principal sum of
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