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and his current wife, Sarah R. Daugharty, deducted these payments
as alimony on their Federal income tax returns for those years.5
Faye did not file Federal income tax returns for the taxable
years 1988 through 1993.
OPINION
The principal issue for decision requires us to determine
whether John's payments of $30,000 per year to Faye during the
years 1988 through 1993 were made in discharge of his legal
obligation to Faye arising out of the marital or family
relationship (hereinafter sometimes referred to as alimony). A
former spouse must include in gross income periodic payments
received as alimony or separate maintenance. Sec. 71(a); Brown
v. Commissioner, 50 T.C. 865, 867-868 (1968), affd. 415 F.2d 310
(4th Cir. 1969). On the other hand, payments which represent a
property settlement are not taxable to the recipient under
section 71. Yoakum v. Commissioner, 82 T.C. 128, 134 (1984);
Thompson v. Commissioner, 50 T.C. 522, 525 (1968). Pursuant to
section 215(a), a taxpayer may deduct amounts paid to a former
spouse if those payments are includable in the former spouse's
5The record contains copies of canceled checks for 1987,
1988, and 1991 through 1993. On most of these checks, John
inserted the notation "alimony".
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