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maintenance or a written instrument incident to the decree, (2) a
written separation agreement, or (3) a decree requiring a spouse
to pay for the support or maintenance of the other spouse. Sec.
71(b)(2); sec. 1.71-1(b)(1), (2), and (3), Income Tax Regs.
Petitioner acknowledges that no written divorce or
separation instrument existed in 2000 when SRC made the payments
at issue to Ali. Petitioner contends that the section
71(b)(1)(A) requirement that the payments at issue be received
under a divorce or separation instrument is met by the State
court’s retroactive approval of the stipulation that petitioner’s
one-half ($12,000) of each monthly payment (totaling $84,000) in
2000 was paid by him to Ali as family support. Petitioner points
out that, under California law, the State court may retroactively
modify an agreement. See In re Marriage of Skelley, 556 P.2d
297, 300 (Cal. 1976)
B. Whether Retroactive Treatment by the State Court of Payments
as Unallocated Family Support Meets the Requirement of
Section 71(b)(1)(A) That the Payments Be Received Under a
Divorce or Separation Instrument
Petitioner contends that, because of the retroactive action
by the State court, the payments from SRC to Ali in 2000 were
payments under a divorce or separation instrument.
We disagree for two reasons. First, payments made before
the existence of a written divorce or separation instrument are
not deductible by the payor spouse under section 215 or its
predecessor. Healey v. Commissioner, 54 T.C. 1702, 1705-1706
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Last modified: May 25, 2011