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While the exception (to the general rule of inclusion)
for amounts “fixed” as child support remained
essentially unchanged, see sec. 71(c)(1), Congress did
overturn the result in Commissioner v. Lester, supra,
see sec. 71(c)(2) (reduction in support that is clearly
associated with a contingency, specified in the divorce
or separation instrument, that relates to a child will
be treated as an amount fixed as payable for child
support). Lester continues, however, to stand for the
proposition that, subject to section 71(c)(2), amounts
will not be treated as child support for purposes of
section 71 unless specifically designated as such in
the governing divorce document.* * *
We must decide, therefore, whether the support terms of the
temporary order and the judgment for dissolution of marriage,
under which Ms. Randich received the payments at issue for the
2000 taxable year, fixed a sum as payable for the support of
petitioners’ minor children.
Neither the temporary order entered on March 25, 1998, nor
the judgment for dissolution of marriage entered on April 12,
2000, provided for a fixed amount payable for the support of
petitioners’ children. Ms. Randich was awarded unallocated
family support of $1,200 per paycheck, or $2,400 per month.
Furthermore, the provision for unallocated family support did not
contain any of the contingencies set forth in section 71(c)(2).
Therefore, normally we would hold that all of the $28,800
annual payment made by Mr. Randich to Ms. Randich would be
considered alimony deductible by Mr. Randich, the payor, and
taxable to Ms. Randich, the payee.
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