Patricia P. Kean - Page 9

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               Mr. Kean filed his U.S. Individual Income Tax Return for               
          1995 on July 8, 1996.  Mr. Kean submitted Form 4868, Application            
          for Automatic Extension of Time to File U.S. Individual Income              
          Tax Return, which provided an automatic extension of time to file           
          his 1995 return to August 15, 1996.  Mr. Kean filed his U.S.                
          Individual Income Tax Return for 1996 on October 17, 1997.                  
          Respondent did not determine a penalty for failure timely to file           
          an income tax return for 1996.                                              
               From January 1 through September 1992, the children resided            
          with both Mr. Kean and Ms. Kean at 144 Lake Road, Far Hills, New            
          Jersey (the marital residence).  During October and November                
          1992, the children resided with Ms. Kean outside the marital                
          residence.  In December 1992, Ms. Kean and the children returned            
          to the marital residence, where the children resided with Mr.               
          Kean and Ms. Kean until at least January 1996.                              
                                     Discussion                                       
          I.  General Rules                                                           
               We consider whether certain payments (disputed payments),              
          made pursuant to court orders issued during the pendency of a               
          divorce proceeding, are to be treated as alimony for Federal                
          income tax purposes.  Generally, alimony and separate maintenance           
          payments (hereinafter collectively referred to as alimony) are              









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