- 11 -
B. Gallo Payment
The issue and arguments here are basically the same as they
were with respect to the $50,000 payment. The issue is whether
petitioner’s obligation to make the Gallo payments was
conditioned on Marilyn’s survival. Petitioner became obligated
to make the Gallo payment pursuant to the settlement stipulation.
The settlement stipulation required petitioner to place $12,500
of the amount to be paid to Mr. Gallo in an escrow account.
Petitioner made the Gallo payment in 1993. Our analysis is the
same as with respect to the $50,000 payment. Petitioner has
failed to prove that his obligation to make the Gallo payment was
conditional on Marilyn’s survival until the time of payment. For
that reason, petitioner had failed to prove that it was a
deductible alimony payment. See Smith v. Commissioner, T.C.
Memo. 1998-166 (to be a deductible alimony payment, obligation to
pay wife’s attorney’s fees must be extinguishable on her death);
Rebura v. Commissioner, T.C. Memo. 1997-38 (same), affd. without
published opinion 139 F.3d 907 (9th Cir 1998). Respondent’s
determination of a deficiency is sustained to the extent
respondent denied petitioner’s deduction for the Gallo payment.
C. Bentley Payment
Petitioner claims that the Bentley payment was for legal
advice concerning tax planning aspects of the marital dissolution
and business-related matters. Petitioner did not testify.
Mr. Bentley testified as to the work he did to earn that fee.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011