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she shall suffer a reduction in that amount of $2,000 a month as
liquidated damages in respect of the reasonable rental value of
the apartment.
During the proceeding giving rise to the settlement
stipulation, Marilyn’s attorney described the $50,000 payment as
“in full and complete satisfaction of all claims of the defendant
[Marilyn] in connection with equitable distribution”.
Petitioner’s attorney in that proceeding did not object to that
characterization. The New York court immediately thereafter
stated that, upon delivery of the $50,000 (into escrow), Marilyn
would transfer to petitioner her interest in certain “upstate”
real property.
Apparently, Marilyn vacated the apartment on time and
received the full $50,000 (the $50,000 payment), since petitioner
deducted the $50,000 payment on his 1993 (calendar year) Federal
income tax return as a deductible payment of alimony. The record
does not establish the date that petitioner made the $50,000
payment. Respondent disallowed petitioner’s $50,000 deduction on
the ground that the $50,000 payment constituted a property
settlement and not deductible alimony.
B. The Deduction for Alimony
It is generally understood that payments of alimony are
deductible to the paying spouse (here, the ex-husband) and
includable in income by the recipient spouse (here, the ex-wife).
The axis along which that statement runs connects, at one end,
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