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The parties further agree that effective with the
August 1984 payment, the wife shall be owner of, and
receive, one-half of husband’s disposable retired or
retainer pay, [i.e.], during the joint lives of the parties,
the husband and wife shall each receive one-half of
husband’s disposable retired or retainer pay, as defined in
the above Act, accruing to him on a monthly basis as a
result of his active duty service in the United States Armed
Forces. The wife shall also be named permanent and
irrevocable beneficiary of husband’s Survivor’s Benefit Plan
in connection with said military retirement.
The parties agree that any decree of divorce hereafter
entered between them shall include therein all appropriate
language necessary to effectuate the foregoing. The parties
further agree to execute any and all other documentation
necessary to effectuate the intent and understandings
expressed in this paragraph. [Emphasis added.]
Pursuant to the provisions of the decree, petitioner
received $13,061 during 1997, representing her half of the
disposable retirement pay. Petitioner did not report this amount
on her 1997 Federal income tax return.
Respondent determined that the $13,061 was properly
includable in petitioner’s gross income for 1997 as pension
income under section 61(a)(11). Petitioner maintains that the
payments represent a nontaxable division of property.
Discussion
In general, gross income is defined by section 61 as
follows:
SEC. 61. GROSS INCOME DEFINED.
(a) General Definition.–-Except as otherwise provided
* * * gross income means all income from whatever source
derived, including * * *
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