John R. and Patricia G. Okerson - Page 14

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          49 Fed. Reg. 34456 (Aug. 31, 1984), payments are treated as                 
          substitute payments for purposes of section 71(b)(1)(D) to the              
          extent that they would begin as a result of the payee spouse’s              
          death and would substitute for a continuation of payments which             
          would otherwise qualify as alimony but which would terminate on             
          account of the payee spouse’s death.  See also H. Rept. 98-432,             
          supra at 1496.  Such is the case here.  All of the post death               
          payments described in the decrees would be made after Okerson’s             
          death, and they would be made only if Okerson died before                   
          petitioner satisfied his alimony obligations under the decrees.             
          The post death payments also would be made in substitute of the             
          alimony payments under the decrees, which would terminate on                
          account of Okerson’s death.                                                 
               Petitioners rely erroneously upon the fact that petitioner             
          never actually made one of these post death payments.  This fact            
          is unimportant.  The standard established by Congress for                   
          substitute payments is not, as petitioners would have it,                   
          whether a payor spouse actually makes a substitute payment.  The            
          standard, as gleaned from section 71(b)(1)(D), as well as from              
          the regulations interpreting that section and from the                      
          legislative history, is whether the payor spouse could have to              
          make a substitute payment upon the death of the payee spouse.               
          Section 71(b)(1)(D) provides that payments qualify as alimony for           
          Federal income tax purposes if the payments are made in cash and            






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