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71(b)(1)(D). As enacted by DEFRA, section 71(b)(1)(D), as one of
the requirements a cash payment must meet to be considered
alimony, provides that the divorce or separation instrument must
state that there is no liability to make a payment after the
death of the payee spouse. The latter requirement was altered 2
years later by the Tax Reform Act of 1986 (TRA), Pub. L. 99-514,
sec. 1843(b), 100 Stat. 2853. As a result of the TRA, if the
other statutory requirements are met, even without language in
the instrument a payment may be alimony if State law terminates
the payor's liability at the death of the payee spouse. See
Cunningham v. Commissioner, T.C. Memo. 1994-474. If Congress had
intended that State law could fix the amount of child support
payments where such amounts are not fixed by the terms of the
divorce or separation instrument, it certainly could have made a
similar change in the wording of section 71(c)(1). We conclude
from the absence of such a change that Congress did not intend
the interpretation that petitioner advocates.
Federal Policy and Pennsylvania Court Rule
Under section 215, an individual taxpayer is allowed to
deduct amounts paid as "alimony or separate maintenance" as
defined under section 71(b). Alimony and separate maintenance
payments are includable in the gross income of the recipient
under section 71.
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