- 8 -
liability. Moreover, the agreement specifically states that each
party waived the right to alimony.
Petitioner argues that the $20,977 was included as income on
his 2000 income tax return, and, therefore, if he was required to
report the stock option proceeds as income, he should be entitled
to an alimony deduction. The Court rejects that argument for two
reasons. First, a payment as alimony qualifies as a deduction
only if it meets the criteria of section 71(b)(1). As discussed
earlier, petitioner's payments to Ms. Lima failed to satisfy
section 71(b)(1)(D). Secondly, in arguing that he included the
stock option proceeds as income on his 2000 income tax return,
petitioner implies that he paid taxes on that income and,
therefore, is entitled to a deduction for payment of that income
to Ms. Lima. That argument fails because petitioner did not pay
income taxes on the sales proceeds of the stock options as he
infers. The option proceeds are not identified by the issuance
of any information returns filed by the payor, and, moreover,
petitioner did not compute a tax on the option proceeds he
received. Petitioner's return includes a Schedule D, Capital
Gains and Losses, on which he reported a short-term capital gain
transaction. On Part I of the schedule, he listed the Best Buy
options, listed a gross sales price of $27,794, a cost/basis of
$27,794, and a zero gain or loss. Petitioner, therefore, paid no
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011