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marital home, a sum approximating $73,000. Since Ms. LaBozetta’s
annual household income precluded her from qualifying for a
mortgage for the remaining postbuyout balance on the home, the
parties further agreed that the amount of buyout equity owed to
petitioner would be reduced by 20 percent of Ms. LaBozetta’s
share in petitioner’s pension, or $19,854. The agreement also
provided that petitioner would owe Ms. LaBozetta $23,400 (with
the parties waiving an actual payment of that amount) to further
reduce the amount of equity owed to petitioner. Petitioner
contends that the $23,400 was actually paid as alimony to Ms.
LaBozetta, and accordingly, should be deductible.
On August 9, 2002, Ms. LaBozetta drafted a check to
petitioner for $29,746.1 Petitioner cashed the check on August
12, 2002, at Fleet Bank in Ridgefield Park, New Jersey.
On April 15, 2003, petitioner timely filed a Form 1040, U.S.
Individual Income Tax Return, for 2003 on which he claimed a
deduction of $23,400 for alimony paid to Ms. LaBozetta.
Respondent issued a notice of deficiency disallowing petitioner’s
deduction.
1 The $29,746 is computed as follows:
Petitioner’s equity in the marital home: $73,000
Ex-wife’s share of petitioner’s pension (19,854)
Petitioner’s waiver of buyout equity (23,400)
Balance to petitioner by check 29,746
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Last modified: May 25, 2011