John R. and Patricia G. Okerson - Page 15

                                       - 15 -                                         
          “there is no liability to make any such payment * * * (in cash or           
          property) as a substitute for such payments after the death of              
          the payee spouse.”  The applicable regulations, specifically                
          section 1.71-1T(b), Q&A-14, Temporary Income Tax Regs., supra,4             
          state:                                                                      
               To the extent that one or more payments are to begin to                
               be made, increase in amount, or become accelerated in                  
               time as a result of the death of the payee spouse, such                
               payments may be treated as a substitute for the                        
               continuation of payments terminating on the death                      
               of the payee spouse which would otherwise qualify as                   
               alimony or separate maintenance payments.  * * *                       
          The legislative history states:                                             
               the bill provides that a payment qualifies as alimony                  
               only if the payor * * * has no liability to make any                   
               such payment for any period following the death of the                 
               payee spouse.  A provision for a substitute payment,                   
               such as an additional amount to be paid as child                       
               support after the death of the payee spouse will                       
               prevent a corresponding amount of the payment to the                   
               payee spouse from qualifying as alimony.  * * *                        
               [H. Rept. 98-432, supra at 1496.]                                      
               We conclude that all of the post death payments described in           
          the decrees are substitute payments for purposes of section                 
          71(b)(1)(D) and turn to decide the tax consequences that result             
          from this characterization.  Pursuant to section 1.71-1T(b), Q&A-           
          13, Temporary Income Tax Regs., supra, the fact that a payor                
          spouse is required to make substitute payments means that none of           


               4 While these temporary regulations were superseded in part            
          by the technical correction provisions of the Tax Reform Act of             
          1986, Pub. L. 99-514, sec. 1843(b), 100 Stat. 2853, the portions            
          of these temporary regulations that we rely upon herein were not            
          affected by those provisions and continue to be effective.                  




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

Last modified: May 25, 2011