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(B) the divorce or separation instrument does not
designate such payment as a payment which is not includable
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
maintenance, the payee spouse and the payor spouse are not
members of the same household at the time such payment is
made, and
(D) there is no liability to make any such payment for
any period after the death of the payee spouse and there is
no liability to make any payment (in cash or property) as a
substitute for such payments after the death of the payee
spouse.
If a payment satisfies all of these factors then the payment is
alimony; if it fails to satisfy any one of these factors then the
payment is not alimony. Jaffe v. Commissioner, T.C. Memo. 1999-
196.
In this case, subparagraphs (A), (C), and (D) of section
71(b)(1) are satisfied and are not in dispute. The issue before
us is whether the payments satisfy the requirement of
subparagraph (B) of section 71(b)(1). Petitioner contends that
because the military retirement payments are specifically labeled
as a "property settlement", such designation should allow the
payments to be treated as nonalimony under section 71(b)(1)(B).
Respondent contends that the classification of the payments as a
"property settlement" is not a designation that the payments
should be excludable from petitioner's income and non-deductible
by Mr. Baker, and that absent such a designation, section
71(b)(1)(B) is satisfied and the payments are alimony.
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Last modified: May 25, 2011