Michael K. Berry - Page 40

                                       - 40 -                                         
         (Ct. App. 1975) (similar).                                                   
              D.   Conclusion--Deductibility of Family Support Payments               
              Given the lack of continuing payment liability and substitute           
         payment liability with respect to petitioner’s family support                
         obligation, the family support payments at issue satisfy the                 
         requirements of section 71(b)(1)(D).  Because the parties do not             
         dispute the applicability of section 71(b)(1)(A)-(C) to those                
         payments, and respondent does not argue any other grounds for                
         nondeductibility (e.g., section 71(c)(1)), petitioner is entitled            
         to deduct the entire amount of family support payments he made to            
         Carmen in 1999 ($49,808).31                                                  
              E.  Payments to Drs. Caffaro and Murphy                                 
                   1.   Procedural Issue                                              
              Petitioner’s petition did not include a claim that he is                


              30(...continued)                                                        
          following the payee spouse’s putative death) should be treated              
          the same as hypothetical payments to a successor custodian.  We             
          would reject any such expansive reading of sec. 71(b)(1)(D) for             
          the same reasons we reject the expansive reading suggested by               
          Wells v. Commissioner, T.C. Memo. 1998-2.  See supra pp. 32-36.             
               31 We recognize that, if Carmen died, petitioner conceivably           
          could be liable to her estate for at least some portion of his              
          family support arrearage.  If that were so, then the portion of             
          petitioner’s 1999 payments to Carmen constituting arrears                   
          ($3,824) arguably would fail to satisfy sec. 71(b)(1)(D).                   
          However, under well-established caselaw involving pre-1984 sec.             
          71, payments of alimony arrearages retained the character of the            
          payments originally due.  See, e.g., Olster v. Commissioner, 79             
          T.C. 456, 462 (1982), affd. 751 F.2d 1168 (11th Cir. 1985).                 
          Absent any indication in the legislative history of the 1984 Act            
          that Congress intended to change that result, we believe the same           
          principle would apply under post-1984 sec. 71.                              





Page:  Previous  25  26  27  28  29  30  31  32  33  34  35  36  37  38  39  40  41  42  43  44  Next

Last modified: May 25, 2011