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alimony terminates at the death of the payee spouse unless the
separation agreement or the divorce decree provides to the
contrary. Therefore, in 1986, Congress struck from section
71(b)(1)(D) the parenthetical providing for alimony treatment
only if the divorce or separation instrument stated that there
was no liability on behalf of the payor spouse to make the
payments after the death of the payee spouse. See sec. 1843(b)
of the Tax Reform Act of 1986, Pub. L. 99-514, 100 Stat. 2853.
But even after the 1986 amendment, whether an obligation to make
payments survives the death of the payee spouse “may be
determined by the terms of the applicable instrument, or if the
instrument is silent on the matter, by looking to State law.”
Kean v. Commissioner, T.C. Memo. 2003-163.
The issue before us is whether the $37,000 payment
petitioner made to Ms. Gamer pursuant to the settlement agreement
was for her support, thus constituting alimony, or in the nature
of a property settlement and therefore not deductible from his
gross income. Specifically, we must decide whether under the
3(...continued)
98-369, 98 Stat. 795, sec. 71(b)(1)(D) provided as follows:
(D) there is no liability to make any such payment
for any period after the death of the payee spouse and
there is no liability to make any payment (in cash or
property) as a substitute for such payments after the
death of the payee spouse (and the divorce or
separation instrument states that there is no such
liability).
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Last modified: May 25, 2011