Chester W. Bonar - Page 6

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          1998 when his daughter Jacqueline Joan Bonar began living with              
               Regardless of the Agreement’s characterization of                      
          petitioner’s payments as alimony, the payments must meet the                
          specific requirements of the Internal Revenue Code in order to be           
          deductible from petitioner’s gross income for Federal income tax            
          purposes.  See INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84               
          (1992); New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440                
          (1934).  Section 71(c) specifically provides that a payment will            
          be “treated as an amount fixed as payable for the support of                
          children of the payor spouse” if the payments are reduced “on the           
          happening of a contingency * * * relating to a child”.  Temporary           
          regulations promulgated under section 71 make clear that payments           
          may be treated as child support “even if other separate payments            
          specifically are designated as payable for the support of a child           
          of the payor spouse.”  Sec. 1.71-1T(c), Q&A-16, Temporary Income            
          Tax Regs., 49 Fed. Reg. 34451, 34456 (Aug. 31, 1984).                       
               Under the terms of the Agreement, the payments at issue are            
          subject to automatic termination upon “the youngest child                   
          reaching age eighteen”.  This contingency renders petitioner’s              
          payments ineligible for treatment as alimony.  See Hammond v.               
          Commissioner, T.C. Memo. 1998-53; Fosberg v. Commissioner, T.C.             
          Memo. 1992-713.  We therefore hold that petitioner’s payments are           
          not deductible from his gross income in 1995 and 1996.                      

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