- 14 -
second mortgage. When petitioner made payments on the second
mortgage, the payments discharged petitioner’s liabilities, not
Betty’s.
Moreover, the evidence does not establish that petitioner’s
payments benefited Betty by increasing the amount she would
receive on a subsequent sale of the residence. The record does
not disclose the price at which Betty sold the residence. In
June 1993, however, Betty’s affidavit submitted in support of an
application for temporary relief stated that the fair market
value of the residence was $123,000 and that the total principal
of all outstanding mortgages thereon was $100,000. At trial,
petitioner indicated that Betty’s calculations were roughly
accurate. He suggested that the fair market value was perhaps
$130,000 and the total of the mortgages was $110,000. The equity
in the residence was at most approximately $30,000. Petitioner,
however, had a lien against the residence for $42,000. Taking
into account the amount of his lien and the lack of proof as to
the sales price of the residence, the record does not establish
how much, if any, proceeds from the sale would benefit Betty.
See Taylor v. Commissioner, supra at 123-124.
We conclude that petitioner’s payments on the second
mortgage are not payments of alimony under section 71(b)(1)(A),
nor are they deductible as such.
We therefore hold (as respondent in fact concedes) that much
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