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On his 1989-93 income tax returns, Dr. Ibach deducted as
alimony the payments he made to petitioner pursuant to Paragraph 7
of the divorce decree.
Notices of Deficiency
Respondent sent a notice of deficiency to petitioner and her
former husband Mr. Dames for their 1989-91 tax years, determining
that petitioner improperly excluded from income $72,600 of alimony
payments for each taxable year. Accordingly, respondent increased
petitioner's taxable income for each year by $50,000. In the
second notice of deficiency sent to petitioner for her 1992 and
1993 tax years, respondent determined that she improperly excluded
from income $72,600 and $32,553 of alimony income for 1992 and
1993, respectively. Accordingly, respondent increased petitioner's
taxable income by $50,000 and $32,553, respectively, for 1992 and
1993. (These determinations were based upon respondent's view that
Dr. Ibach's payments to petitioner were taxable to her as alimony
up to 10 percent of the principal sum in each year.)
OPINION
The issue for decision is whether payments Dr. Ibach made to
petitioner pursuant to Paragraph 7 of the divorce decree during the
years in issue were alimony or a property settlement. Petitioner
contends that the payments were nontaxable, lump-sum installment
payments of a property settlement, not in the nature of support.
Respondent disagrees.
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