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Petitioner paid the $32,000 to his former spouse during
2000. On their joint Federal income tax return for 2000,
petitioners claimed a deduction for the $32,000 lump-sum alimony
payment. In the notice of deficiency, respondent disallowed the
deduction on the ground that the $32,000 payment was not alimony
under section 71(b)(1)(D).
For tax purposes, the term "alimony or separate maintenance
payment" is defined in section 71(b)(1) as any payment in cash
meeting the following four criteria:
(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.
Petitioner's deduction for alimony is allowable only if the four
criteria of section 71(b)(1) are met. Jaffe v. Commissioner,
T.C. Memo. 1999-196. Respondent agrees that the requisites of
section 71(b)(1)(A), (B), and (C) have been met, but argues that
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