- 9 -
the payee spouse and there is no liability to
make any payment (in cash or property) as a
substitute for such payments after the death
of the payee spouse.
Section 71 was amended by the Deficit Reduction Act of 1984,
Pub. L. 98-369, sec. 422(a), 98 Stat. 494, 795, to establish an
objective standard to distinguish between a payment received in the
division of property (which is not includable in gross income) and
a payment received as spousal support (which is includable in gross
income). See Hoover v. Commissioner, 102 F.3d 842, 845 (6th Cir.
1996), affg. T.C. Memo. 1995-183; see also H. Rept. 98-432 (Part
2), at 1495 (1984) ("The committee bill attempts to define alimony
in a way that would conform to general notions of what type of
payments constitute alimony as distinguished from property
settlements and to prevent the deduction of large, one-time lump-
sum property settlements.").
The parties agree that Mr. Goldman's $20,000 monthly payments
to Ms. Parker satisfy subparagraphs (A), (C), and (D) of section
71(b)(1). Therefore, the dispositive question is whether these
monthly payments satisfy the requirement of subparagraph (B), which
treats a payment as nonalimony if the governing divorce or
separation instrument designates the payment as such.
In ascertaining the applicability of subparagraph (B) of
section 71(b)(1), we believe the divorce or separation instrument
need not mimic the statutory language of the subparagraph (e.g.,
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011