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(C) in the case of an individual legally separated
from his spouse under a decree of divorce or of
separate maintenance, the payee spouse and the payor
spouse are not members of the same household at the
time such payment is made, and
(D) there is no liability to make any such payment for
any period after the death of the payee spouse and
there is no liability to make any payment (in cash or
property) as a substitute for such payments after the
death of the payee spouse.
Sec. 71(b)(1).
The payments at issue meet each of these requirements.
First, petitioner received payments under a divorce or separation
agreement. Second, the stipulation re modification of judgment
of dissolution does not state that petitioner need not include
the payments in gross income or that James Little may not deduct
the payments. Third, petitioner and James Little lived apart
when James Little made the payments at issue. Fourth, the
provision in the judgment of dissolution that payments were to
terminate when petitioner or James Little died was not modified
by the stipulation re modification of judgment of dissolution.
The stipulation re modification of judgment of dissolution
states: “the spousal support shall be reduced to $4,000 per
month and shall continue through January 31, 1992”. The
modification relates to the marital settlement agreement. The
judgment of dissolution provides that spousal support terminates
if petitioner or James Little dies. The stipulation re
modification of judgment of dissolution did not change this
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