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Petitioners’ Primary Arguments
Generally, gross income includes amounts received as alimony
or separate maintenance payments. Secs. 61(a)(8), 71(a).
Section 71(c) provides that section 71(a) does not apply to any
payment that is fixed by the terms of the divorce or separation
instrument as payable for the support of the children of the
payor spouse. If alimony is includable in the payee spouse's
gross income under section 71(a), the payor spouse is allowed to
deduct the amount of the alimony paid. Sec. 215(a) and (b).
Section 71(b)(1) defines alimony or separate maintenance as
any cash payment meeting the four criteria provided in
subparagraphs (A) through (D) of that section. Accordingly, if
any portion of the money paid to Ms. Ambrose meets all four
enumerated criteria, that portion is alimony.7
7 Sec. 71(b)(1) provides:
SEC. 71(b) ALIMONY OR SEPARATE MAINTENANCE PAYMENTS
DEFINED.--For purposes of this section--
(1) IN GENERAL.--The term "alimony or separate
maintenance payment" means any payment in cash if--
(A) such payment is received by (or on behalf
of) a spouse under a divorce or separation
instrument,
(B) the divorce or separation instrument does
not designate such payment as a payment which is
not includible in gross income under this section
and not allowable as a deduction under section
215,
(C) in the case of an individual legally
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