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the payments, or for making other payments in substitute of those
payments, does not continue for any period after the payee
spouse’s death. Sec. 71(b)(1), (e); see also sec. 71(c)(1) (a
payee spouse’s gross income does not include any part of a
payment that a divorce or settlement agreement fixes as payable
for the support of children of the payor spouse). We concern
ourselves only with the requirement in dispute; i.e., the payor
spouse’s liability for the payments and for any substitute
payments must cease as of the payee spouse’s death. See sec.
71(b)(1)(D).3 Whether a payor spouse is liable to make an
alimony or substitute payment after a payee spouse’s death is
determined by looking first to the terms of the applicable
divorce documents which, if they speak unambiguously as to this
matter, are dispositive of the matter. See Hoover v.
Commissioner, 102 F.3d 842 (6th Cir. 1996), affg. T.C. Memo.
1995-183. In construing these documents, the mere fact that the
documents may characterize a payment as alimony has no effect on
the consequences of that payment for Federal income tax purposes.
Id. at 844.
3 Sec. 71(b)(1)(D) provides that payments in cash qualify as
alimony if “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.”
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Last modified: May 25, 2011