- 9 - 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...)Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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