George F. Walker - Page 12

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               In summary, petitioner has failed to demonstrate that he               
          undertook the minority education business with the actual and               
          honest objective of making a profit.  Accordingly, we find on the           
          basis of the facts and circumstances of this case that peti-                
          tioner's activity with respect to the minority education business           
          is not an activity engaged in for profit and is therefore subject           
          to the limitations imposed by section 183.                                  
               The second issue for decision is whether payments of $2,400            
          to petitioner's former wife constitute deductible alimony.  Peti-           
          tioner deducted $2,400 for monthly payments made to his former              
          wife pursuant to their separation agreement.  Respondent dis-               
          allowed this deduction in the notice of deficiency.                         
               Section 215(a) permits a deduction for the payment of                  
          alimony during a taxable year.  Section 215(b) defines alimony by           
          reference to section 71(b).  Section 71(b)(1) defines alimony as            
          any cash payment meeting the four criteria provided in subpara-             
          graphs (A) through (D) of that section.  Accordingly, if any                
          portion of the payments made by petitioner fails to meet the four           
          enumerated criteria, that portion is not alimony and is not                 
          deductible by petitioner.                                                   
               Neither of the parties argues that the requirements of sub-            
          paragraphs (A), (B), and (C) of section 71(b)(1) have not been              
          satisfied.  Their disagreement focuses on the provisions of                 
          subparagraph (D).  Section 71(b)(1)(D) requires that the payor              

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