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Marten did not include these payments as income on her 1993 and
1994 Federal income tax returns.
Niklas died on June 19, 1995.
OPINION
The sole issue for decision is whether premiums paid by Mr.
Lane on the $750,000 policy were alimony. If the payments are
alimony, Ms. Marten must include the payments in her gross
income, and Mr. Lane is entitled to deduct these payments. See
secs. 61(a)(8), 215(a). However, if the payments are not
alimony, Ms. Marten need not include the payments in income, and
Mr. Lane cannot deduct them.
The parties argue that our analysis should focus on section
71(b) as amended by the Deficit Reduction Act of 1984, Pub. L.
98-369, sec. 422, 99 Stat. 494, 795 (the DRA ‘84). The DRA ‘84,
however, is applicable only to divorce instruments executed after
December 31, 1984, or modified after December 31, 1984, where the
modified instrument states that the amended version of section 71
will apply. See Deficit Reduction Act of 1984, supra at 798. In
the present case, the support decree was entered on April 11,
1984, and the modified decree--entered January 27, 1987–-did not
provide that the amended version of section 71 was applicable.
We, therefore, must apply former section 71 in determining
whether the premium payments constitute alimony.
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