Estate of Monte H. Goldman - Page 1


                                   112 T.C. No. 21                                    

                               UNITED STATES TAX COURT                                

            ESTATE OF MONTE H. GOLDMAN, DECEASED, CAROLE SCHUTTER, f.k.a              
               CAROLE GOLDMAN, PERSONAL REPRESENTATIVE, Petitioner v.                 
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 183-97.                Filed June 1, 1999.                  

                    On Nov. 12, 1985, H and W executed a Property                     
               Settlement Agreement (the agreement) in connection with                
               their divorce; the agreement was approved by the divorce               
               court.  Par. 2 of the agreement provides for a division                
               of marital property.  Par. 2.2.9 of the agreement                      
               provides that "In furtherance of the equitable division                
               of property" H shall pay W $20,000 a month for 240                     
               months.  The monthly payments terminate at W's death.                  
               Par. 6.5 of the agreement provides that all transfers of               
               property are to be subject to the provisions of sec.                   
               1041, I.R.C., and shall be reported on H and W's income                
               tax returns "as a non-taxable event".  The agreement                   
               further provides that both W and H waive spousal support.              
                    H received an opinion letter from a law firm that                 
               the $20,000 monthly payments were deductible as alimony.               
               On H's 1992, 1993, and 1994 Federal income tax returns,                
               the payments (totaling $240,000 per year) were                         

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