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deductible as alimony. In 2004, after P commenced this
proceeding challenging R’s disallowance of that
deduction, the court restated in an order that it
intended for Federal income tax purposes that all of
the $117,000 and the $33,500 be alimony deductible by P
and includable in O’s income. The court also stated in
this order that P had as of then paid both of these
amounts to O, who was still alive.
Held: An alimony deduction for Federal income tax
purposes rests on fulfilling the requirements set forth
in sec. 71, I.R.C. Sec. 71(b)(1)(D), I.R.C., provides
that payments may qualify as alimony only if “there is
no liability to make any such payment * * * as a
substitute for such payments after the death of the
payee spouse.”
Held, further, in accordance with sec. 1.71-1T(b),
Q&A-14, Temporary Income Tax Regs., 49 Fed. Reg. 34456
(Aug. 31, 1984), the payments which P was liable to
make upon O’s death are substitute payments under sec.
71(b)(1)(D), I.R.C., in that those post death payments
would begin as a result of O’s death and would
substitute for a continuation of the payments which
terminated on O’s death and which otherwise qualified
as alimony.
Held, further, in accordance with sec. 1.71-1T(b),
Q&A-13, Temporary Income Tax Regs., supra, the fact
that P was liable to make the substitute payments means
that P may not deduct any of the $21,600 as alimony for
Federal income tax purposes, even though the $21,600
would have otherwise been deductible as such.
Michael J. Stengel, for petitioners.
James L. May, Jr., for respondent.
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