- 16 -
the corresponding payments which otherwise qualified as alimony
under section 71 are deductible as alimony. See H. Rept. 98-432,
supra at 1496; see also Cunningham v. Commissioner, T.C. Memo.
1994-474 (“If a payor spouse continues to be liable to make even
one otherwise qualifying payment after the death of the payee
spouse, none of the related payments required before the payee
spouse’s death will be alimony.”). Section 1.71-1T(b), Examples
(1) and (2), Temporary Income Tax Regs., supra, illustrates this
point. Under Example (1), the divorce decree states that A must
pay alimony to B in the form of six annual payments of $30,000.
The decree also states that this obligation will terminate upon
the death of B, but if any of the children of A and B are minors
at that time, A must then make annual payments of $10,000 to a
trust benefiting those children. The example states that A’s
liability to make the $10,000 payments is a substitute for
$10,000 of each of the $30,000 payments and that $10,000 of each
$30,000 payment fails to qualify as alimony. Under Example (2),
the divorce decree states that A must pay alimony to B in the
form of 15 annual payments of $30,000. The decree also states
that this obligation will terminate upon the death of B but that
A must then pay any unpaid amount to B’s estate in a lump sum.
Example (2) states that A’s liability to pay the lump sum is a
substitute for the full amount of each of the $30,000 payments
and that none of the $30,000 payments qualifies as alimony.
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