- 6 -
maintenance payments. See secs. 61(a)(8), 71(a). At the time of
petitioner’s divorce in 1983, section 71 provided:
If a wife is divorced or legally separated from her
husband under a decree of divorce * * *, the wife’s
gross income includes periodic payments * * *
received after such decree in discharge of * * * a
legal obligation which, because of the marital or
family relationship, is imposed on or incurred by
the husband under the decree or under a written
instrument incident to such divorce or separation.
Section 71 was amended by the Deficit Reduction Act of 1984
(DEFRA 1984), Pub. L. 98-369, sec. 422(a), 98 Stat. 494, 795.
However, DEFRA 1984 is applicable only to divorce instruments
executed after December 31, 1984, or modified after December 31,
1984, where the modified instrument states that the amended version
of section 71 will apply. See DEFRA 1984, supra at 798. Here, the
agreement was entered in April 1983 and the modified agreement was
entered in August 1996. The amended agreement neither modified the
description or terms (i.e., the amount and frequency) of the alimony
payments nor expressly provided that amended section 71 was
applicable. Thus, we apply former section 71 to determine whether
the military retirement payments petitioner received constitute
alimony.
Pursuant to former section 71, only payments in the nature of
maintenance or support (as opposed to a transfer of property between
spouses) are treated as alimony for Federal income tax purposes.
See, e.g., Hoover v. Commissioner, 102 F.3d 842, 844-845 (6th Cir.
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011