Randolph S. Simpson I - Page 9

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          Section 71 was amended by the Deficit Reduction Act of 1984, Pub.           
          L. 98-369, sec. 422(a), 98 Stat. 494, 795, to establish an                  
          objective standard to distinguish between a payment received in             
          the division of property (which is not includable in gross                  
          income) and a payment received as spousal support (which is                 
          includable in gross income).  Hoover v. Commissioner, 102 F.3d              
          842, 845 (6th Cir. 1996), affg. T.C. Memo. 1995-183; H. Rept. 98-           
          432 (Part II), at 1495 (1984) (“The committee bill attempts to              
          define alimony in a way that would conform to general notions of            
          what type of payments constitute alimony as distinguished from              
          property settlements and to prevent the deduction of large, one-            
          time lump-sum property settlements”.).                                      
               In this case, the $17,900 payment petitioner made to Ms.               
          Simpson in 1997 was a property settlement and not deductible                
          alimony.  Although the transfer was made under a divorce or                 
          separation instrument, the payment was designated in the divorce            
          decree as part of the division of the community estate between              
          the parties.  The divorce decree specifically stated that the               
          payment “does not constitute, nor shall it be interpreted to be,            
          any form of spousal support, alimony, or child support.”  In                
          ascertaining the applicability of subparagraph (B) of section               
          71(b)(1), “the divorce or separation instrument need not mimic              
          the statutory language of the subparagraph (e.g., the instrument            
          need not specifically refer to sections 71 and 215).”  Estate of            

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