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Respondent determined a deficiency in petitioner’s Federal
income tax of $1,549 for the taxable year 1999.
The issue for decision is whether amounts petitioner
received pursuant to a divorce decree are includable in her
income as pension income or, alternatively, as alimony income.
Some of the facts have been stipulated and are so found.
The stipulations of fact and the attached exhibits are
incorporated herein by this reference. Petitioner resided in
Jacksonville Beach, Florida, on the date the petition was filed
in this case.
Petitioner and her former husband, James Fredrick Newell,
Jr., married in 1953 and divorced in 1984. At the time of the
divorce, Mr. Newell was receiving monthly military retirement
payments from the United States Navy Finance Center. The assets
owned by petitioner and Mr. Newell at that time consisted
primarily of the marital residence, the military pension, a car,
a truck, a boat, and household furnishings. Upon divorce,
petitioner received the car and household furnishings, and Mr.
Newell received the truck and the boat. Petitioner bought Mr.
Newell’s interest in the marital residence using funds which she
had borrowed from her daughter. The divorce decree, entered by
the Circuit Court of the City of Virginia Beach, Virginia, on
April 3, 1984, nunc pro tunc as of February 29, 1984, provided in
relevant part as follows:
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