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report.3 The “Dissomaster” report indicated that petitioner was
to pay family support of $3,238 per month, of which $2,857 was to
be for spousal support and $381 was to be for child support.4
Mr. Young, allegedly, relied upon this report when drafting the
MTA. Petitioner also claimed dependency exemption deductions for
Christopher and Lindsey on his 1990 and 1991 tax returns. In the
notice of deficiency, respondent disallowed petitioner’s alimony
deductions.
Discussion
Section 215(a) allows a deduction for the payment of alimony
during a taxable year. Section 215(b) defines alimony as payment
that is includable in the gross income of the recipient under
section 71. Section 71(b) provides a four-step inquiry for
determining whether a cash payment is alimony. Section 71(b)
provides:
(1) In general.--The term "alimony or separate
maintenance payment" means any payment in cash if--
(A) such payment is received by (or on behalf
of) a spouse under a divorce or separation
instrument,
(B) the divorce or separation instrument does
not designate such payment as a payment which is
not includable in gross income under this section
3 A “Dissomaster” is a commercially available computer
program used by family law practitioners to compute support
payment amounts based on income and other factors.
4 $2,857 divided by $3,238 equals approximately 88 percent.
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