Michael Robert Peterson - Page 6

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               Payments to support children generally are not deductible.             
          Sec. 71(c).  However, alimony or separate maintenance payments              
          generally are deductible by the payor spouse.  Sec. 215.  Alimony           
          or separate maintenance payments are defined by section 71(b),              
          which provides in part:                                                     
                    SEC. 71(b). Alimony or Separate Maintenance                       
               Payments Defined.--For purposes of this section--                      
                         (1) In general.–-The term “alimony or                        
                    separate maintenance payment” means any payment in                
                    cash if--                                                         
                              (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 includible 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 present case, the parties focus on whether the                  
          requirements of section 71(b)(1)(D) have been satisfied.  These             
          requirements are satisfied if petitioner had “no liability to               
          make any such payment for any period after the death of the payee           





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