David K. and Alice Vanarsdall - Page 8

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          Consequently, that Court held that, because the court order did             
          not specifically designate the payments as nonalimony, thereby              
          making them tax free to the recipient, the payments would be                
          treated as alimony for Federal income tax purposes.  In this                
          case, the Agreement was not silent as to the designation of                 
          payments from Mr. Vanarsdall to the former spouse.  On the                  
          contrary, the Agreement specifically stated that the payments               
          “shall constitute property settlement and not maintenance or                
          alimony”.  This designation is a “clear, explicit, and express              
          direction” that the payments were not alimony for Federal income            
          tax purposes.                                                               
               Furthermore, petitioners’ reliance on Baker in support of              
          their assertion is misplaced.  In Baker, payments between the               
          former spouses were made pursuant to a Judgment of Divorce that             
          labeled the payments “property settlement”.  This Court held that           
          this blanket label, without further clarification, “does not                
          clearly inform us that the parties considered the Federal income            
          tax consequences of the payments under sections 71, [and] 215".             
          Baker v. Commissioner, supra.  Petitioner and the former spouse             
          did not simply label the payments between them a property                   
          settlement without further discussion.  On the contrary, the                
          Agreement specifically states that such payments are “not                   
          maintenance or alimony”.  The Agreement further provides that the           
          former spouse reimburse Mr. Vanarsdall for her portion of the               






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