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U.S. 299 (1961). The amount of child support must be fixed "in
terms of an amount of money or a part of the payment" in order
for it to be excludable from the payee spouse's income and
nondeductible by the payor spouse. Sec. 71(b). The statutory
requirement is strict and carefully worded.
In Commissioner v. Lester, supra, the Supreme Court held
that periodic payments made by a husband to his divorced wife
pursuant to a written agreement entered into by them and approved
by the divorce court were deductible by the husband, as alimony,
and includable in the wife's gross income where an amount or
portion of the periodic payments was not specifically earmarked
as payable for the support of the children.7
6(...continued)
(b) Payments to Support Minor Children.-–Subsection (a)
shall not apply to that part of any payment which the terms
of the decree, instrument, or agreement fix, in terms of an
amount of money or a part of the payment, as a sum which is
payable for the support of minor children of the husband.
For purposes of the preceding sentence, if any payment is
less than the amount specified in the decree, instrument, or
agreement, then so much of such payment as does not exceed
the sum payable for support shall be considered a payment
for such support.
7For divorce or separation agreements executed after Dec.
31, 1984, Congress overruled Commissioner v. Lester, 366 U.S. 299
(1961), in that the amount by which support is reduced upon
contingencies involving a child is treated as "fixed" as child
support. See sec. 71(c), as amended by DEFRA sec. 422(a). The
aforesaid is also true with respect to divorce or separation
instruments (as defined in sec. 71(b)(2), as amended) executed
before Jan. 1, 1985, but modified on or after that date if the
modification expressly provides that the amendments to sec. 71
(continued...)
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