Fred J. Pettid - Page 22




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             Alimony or Separate Maintenance                                          
                  The principal issue in this case is whether the                     
             payments made by petitioner to Ms. Wagner are properly                   
             characterized as "alimony or separate maintenance pay-                   
             ments," deductible under section 215(a).  Section 215(b)                 
             provides that the term "alimony or separate maintenance                  
             payment" means "any alimony or separate maintenance payment              
             (as defined by section 71(b)) which is includible in the                 
             gross income of the recipient under section 71."  Section                
             71(b) provides as follows:                                               

                       SEC. 71(b).  Alimony or Separate Maintenance                   
                  Payments Defined.--For purposes of this section--                   
                            (1) In General.--The term "alimony or                     
                       separate maintenance payment" means any                        
                       payment in cash if--                                           
                                 (A) such payment is received by                      
                            (or on behalf of) a spouse under a                        
                            divorce or separation instrument,                         
                                 (B) the divorce or separation                        
                            instrument does not designate such                        
                            payment as a payment which is not                         
                            includible in gross income under                          
                            this section and not allowable as a                       
                            deduction under section 215,                              
                                 (C) in the case of an individual                     
                            legally separated from his spouse under                   
                            a decree of divorce or of separate main-                  
                            tenance, the payee spouse and the payor                   
                            spouse are not members of the same house-                 
                            hold at the time such payment is made,                    
                            and                                                       







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