Jane Gilbert - Page 7




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                         (A) such payment is received by (or on behalf of)            
                    a spouse under a divorce or separation instrument,                
                         (B) the divorce or separation instrument does                
                    not designate such payment as a payment which is                  
                    not includable in gross income under this section                 
                    and not allowable as a deduction under section                    
                    215,                                                              
                         (C) in the case of an individual legally                     
                    separated from his spouse under a decree of                       
                    divorce or of separate maintenance, the payee                     
                    spouse and the payor spouse are not members of the                
                    same household at the time such payment is made,                  
                    and                                                               
                         (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.                
               In the instant case, the parties agree that the unallocated            
          support payments meet the requirements subparagraphs (A), (B),              
          and (C) of section 71(b)(1).  The parties, however, dispute the             
          application of subparagraph (D) of section 71(b)(1).  If Mr.                
          Hawley is obligated to make one or more substitute payments after           
          the death of Ms. Gilbert, then none of the unallocated support              
          payments will be considered alimony.  See Gonzales v.                       
          Commissioner, supra; sec. 1.71-1T(b), Q&A-13, Temporary Income              
          Tax Regs., 49 Fed. Reg. 34456 (Aug. 31, 1984).9                             

               9Mr. Hawley contends that we should follow Simpson v.                  
          Commissioner, T.C. Memo. 1999-251 (Pa. case), and Lawton v.                 
          Commissioner, T.C. Memo. 1999-243 (Pa. case), which held that               
          unallocated payments are considered alimony.  However, those                
          cases considered the application of sec. 71(c) and did not                  
          directly address the application of subpar. (D) of sec. 71(b)(1)            
                                                             (continued...)           





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