Linda J. Baxter - Page 4




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          these disputes construed Ray's obligations under paragraph 5 of             
          the agreement to continue as long as Linda did not remarry or               
          move from the marital home, even though the children had moved              
          (the consequence of Linda's death was not addressed).                       
               During the years in issue Ray made the following payments to           
          or on behalf of Linda pursuant to paragraph 5 of the agreement:             
                                        1993             1994                         
               Home mortgage            $23,384        $13,691                        
               Yard maint.              940            -0-                            
               Total payments           24,324         13,691                         
               Ray deducted as alimony the total payments (the payments)              
          for each year on the joint Federal income tax return that he                
          filed for those years with Janet S. Baxter (Janet).  Linda did              
          not include these amounts as alimony income on her Federal income           
          tax returns for those years.                                                
               Respondent took inconsistent positions in the notices of               
          deficiency upon which these consolidated cases are based.  In the           
          notice of deficiency sent to Ray and Janet, respondent disallowed           
          the alimony deductions attributable to the payments upon the                
          ground that the payments did not constitute alimony within the              
          meaning of section 71(b), and, therefore, could not be deducted             
          under section 215.  In the notice of deficiency issued to Linda,            
          respondent determined that the payments must be included in her             
          income for the appropriate year as alimony under section 71.                







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