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Section 71(c)(1) provides, however, that the general inclusion
rule of section 71(a) does not apply to “that part of any payment
which the terms of the divorce or separation instrument fix (in
terms of an amount of money or a part of the payment) as a sum
which is payable for the support of children of the payor
spouse.”
The parties agree petitioner’s family support payments to
Carmen6 satisfy the requirements of section 71(b)(1)(A)-(C) for
qualification as alimony.7 They disagree whether those payments
satisfy section 71(b)(1)(D). For ease of reference, we shall
refer to the types of liability described in the first and second
clauses of section 71(b)(1)(D) as “continuing payment liability”
6 We address petitioner’s payments to Drs. Caffaro and
Murphy in part I.E.
7 The parties stipulate that $3,824 of the $49,808 paid by
petitioner to Carmen in 1999 “represented amounts paid by
petitioner which were attributable to family support arrearages
from prior years.” That language is potentially broad enough to
include interest (i.e., the $2,196 interest component of
petitioner’s Dec. 31, 1998, arrearage), which, unlike qualifying
alimony, is generally not deductible in this context. See sec.
163(h). The record does not reflect whether the Superior Court
in fact credited the $3,824 to pre-1999 family support
(principal), interest thereon, or both (or neither, for that
matter, see supra note 4). On brief, however, respondent does
not distinguish between petitioner’s payments of current and past
due (pre-1999) family support in 1999, referring to such amounts
in the aggregate as “family support”, the deductibility of which
turns on the application of sec. 71(b)(1)(D). Accordingly, we
deem respondent to have conceded that the arrears paid by
petitioner to Carmen in 1999 were family support rather than
interest.
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