- 2 - 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.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
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