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that the withdrawals by Ms. Jaffe are not includable in her gross
income and are not deductible by Mr. Jaffe.
Under section 71(b)(1)(B), if a divorce or separation
agreement designates that payments by the payor-spouse are not
deductible under section 215, and that such payments are not
includable in the gross income of the payee-spouse under section
71, such amounts are not alimony under section 71(a) and,
therefore, are not includable in the recipient's gross income and
are not deductible by the payor. In the case here, there was no
such designation. Although the agreed order of September 4,
1992, provided that Mr. Jaffe "shall be responsible for income
taxes due on the amount which is ultimately adjudicated to have
been his alimony pendente lite obligation", such language, in the
view of the Court, does not suffice to constitute a designation
for purposes of section 71(b)(1)(B). Cf. Estate of Goldman v.
Commissioner, 112 T.C. ___ (1999); Richardson v. Commissioner,
T.C. Memo. 1995-554, affd. 125 F.3d 551 (7th Cir. 1997). The
Court, therefore, rejects respondent's argument that the agreed
order of September 4, 1992, constituted a designation within the
purview of section 71(b)(1)(B). Accordingly, as to one-half of
the withdrawals by Ms. Jaffe during 1994, section 71(b)(1)(B)
does not apply to make those withdrawals nondeductible by the
payor-spouse nor preclude such withdrawals from being included in
the gross income of the recipient spouse, Ms. Jaffe.
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