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payments are to be taxable to petitioner and deductible by Mr.
Mozley. Fourth, the agreement states that if the intended tax
consequences of the payments (i.e., taxable to petitioner;
deductible by Mr. Mozley) were judicially altered, the amount to be
paid to petitioner would become subject to renegotiation.
The language of the agreement is unambiguous; it contains
express direction that the military retirement payments petitioner
is to receive constitute alimony. These payments were (1) periodic;
(2) received after a decree in discharge of a legal obligation; and
(3) because of the marital or family relationship, imposed on or
incurred by the husband under the decree or under a written
instrument incident to such divorce or separation. See Brodersen
v. Commissioner, 57 T.C. 412, 415-416 (1971).
Both petitioner and Mr. Mozley were represented by counsel.
There is nothing in the record to indicate that the agreement was
negotiated other than at arm’s length. We therefore assume that the
parties considered their respective tax obligations.
To conclude, considering all of the facts and circumstances
herein, we hold that the military retirement payments petitioner
received during the years in issue were in the nature of alimony and
thus constitute taxable income to her.
In light of this holding, we need not address the issue of
whether the retirement payments constitute pension income.
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