Marlin G. Springer - Page 6

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               February 1, 1999 and on February 1, 2000.  This portion                
               of the alimony to be paid by the respondent shall not                  
               terminate upon either the death of the respondent or                   
               the remarriage of the petitioner.  These alimony                       
               payments are due on the first day of February each year                
               as set forth above and if not paid shall bear interest                 
               at the then current judgment rate as prescribed by the                 
               Nebraska Supreme Court.  All alimony ordered herein                    
               shall be a judgment from the date of decree until paid                 
               in full or released.                                                   
          The divorce decree also generally incorporated the agreements               
          contained in the other articles of the marital settlement.                  
               Petitioner made the $50,000 payment to Ms. Springer in 1996            
          in satisfaction of article 6 of the marital settlement and as               
          ordered in the divorce decree.                                              
               Petitioner timely filed Form 1040, U.S. Individual Income              
          Tax Return, for 1996.  On the Form 1040, petitioner claimed a               
          deduction for alimony paid of $68,000.4  On or about June 6,                
          2000, respondent commenced his examination of petitioner’s 1996             
          return.  On September 22, 2000, respondent issued a notice of               
          deficiency to petitioner for the taxable year 1996.  In the                 
          notice, respondent disallowed $50,000 of the claimed deduction              
          for alimony paid on the ground that “Lump-sum cash or property              






               4Of this amount, $50,000 was attributable to the annual                
          payment, and it appears that the remaining $18,000 was                      
          attributable to the monthly payments of $1,500 (12 months x                 
          $1,500 = $18,000).                                                          




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