- 19 - gross income under section 71. Yoakum v. Commissioner, supra at 134.6 Thus, if the payments in the instant case constitute alimony, then Faye must include these amounts in income,7 and John and Sarah may deduct them pursuant to section 215(a). Alternatively, if the payments represent a property settlement, then Faye need not include these amounts in income, and John and Sarah are not entitled to deduct them. Respondent has protected 6The provisions of sec. 71(a) applicable to this case provided: (1) Decree of divorce or separate maintenance.-- If a wife is divorced or legally separated from her husband under a decree of divorce or of separate maintenance, the wife's gross income includes periodic payments (whether or not made at regular intervals) received after such decree in discharge of (or attributable to property transferred, in trust or otherwise, in discharge of) a legal obligation which, because of the marital or family relationship, is imposed on or incurred by the husband under the decree or under a written instrument incident to such divorce or separation. Secs. 71 and 215 were amended by sec. 422(a) and (b) of the Deficit Reduction Act of 1984, Pub. L. 98-369, 98 Stat. 795, 797. The 1984 amendments apply to divorce or separation instruments modified on or after Jan. 1, 1985, if the modification provides that the 1984 amendments govern. The amendments do not apply to this litigation. 7In addition to sec. 71(a), sec. 61(a)(8) requires a taxpayer to include "Alimony and separate maintenance payments" in gross income.Page: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Next
Last modified: May 25, 2011