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Accordingly, petitioner’s base amount and adjusted base amount
for purposes of the section 86 calculation are zero. See sec.
86(c)(1)(C) and (2)(C).
Taking into account petitioner’s 1999 filing status, his
1999 modified adjusted gross income, and the Social Security
benefits he received that year, 85 percent of those benefits are
includable in his 1999 income. See sec. 86(a), (c).
Respondent’s determination in this regard is, therefore,
sustained.
B. Alimony Deduction
At trial, petitioner claimed an alimony deduction for the
lump-sum alimony payments made to his former spouse and the
payments made on her behalf as required by the terms of the
settlement agreement.4 Respondent contends that the payments
made by petitioner pursuant to the terms of the settlement
agreement are not alimony within the meaning of section 71, and,
thus, petitioner is not entitled to an alimony deduction under
section 215.5
4 Petitioner erroneously filed a 1999 joint return with his
former spouse. As filed, it would have made little sense to
claim an alimony deduction on that return. The alimony deduction
issue raised at trial was tried by express consent. See Rule
41(b).
5 Respondent now concedes that the payments made by
petitioner for his former spouse’s health insurance premiums meet
the definition of alimony under sec. 71 and are deductible by
petitioner under sec. 215.
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