- 13 -
received income under the general principle of Old Colony Trust
Co. v. Commissioner, 279 U.S. 716 (1929) (payment by a third
party of a person’s legal obligation is taxable income to that
person). Accordingly, in such cases, one-half of the mortgage
payment is includable in the gross income of the payee spouse
and, to the extent it otherwise qualifies as alimony, it is
deductible by the payor spouse as alimony. See Taylor v.
Commissioner, 45 T.C. 120, 123-124 (1965); Simpson v.
Commissioner, T.C. Memo. 1999-251; Zampini v. Commissioner, T.C.
Memo. 1991-395; Rev. Rul. 67-420, 1967-2 C.B. 63; see also sec.
1.71-1T(b), Q&A-6, Temporary Income Tax Regs., 49 Fed. Reg. 34455
(Aug. 31, 1984).
Applying those principles here, we hold that petitioner may
deduct as alimony one-half the payments on the first mortgage
that he made in 1994 pursuant to the orders of the State court.
Petitioner’s reimbursement to Betty in 1994 of the 1993 real
estate taxes and home insurance premiums produces the same
result; one half of those amounts were for the benefit of Betty,
who, in 1993, held title jointly with petitioner. Those amounts
also constitute alimony paid by petitioner in 1994. See
Leventhal v. Commissioner, T.C. Memo. 2000-92.
The other payments at issue in 1994, 1995, and 1996 all
consist of petitioner’s court-ordered payments upon the second
mortgage. Petitioner alone was liable on the note securing the
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011