- 4 -
there is no liability to make any payment (in cash or
property) as a substitute for such payments after the
death of the payee spouse.
If the payor is liable for any qualifying payment after the
recipient’s death, none of the related payments required will be
taxed as alimony. Sec. 1.71-1T(b), Q&A-13, Temporary Income Tax
Regs., 49 Fed. Reg. 34456 (Aug. 31, 1984). Whether a postdeath
obligation exists may be determined by the terms of the divorce
or separation instrument or, if the instrument is silent on the
matter, by State law. Morgan v. Commissioner, 309 U.S. 78, 80-81
(1940); see Kean v. Commissioner, 407 F.3d 186 (3d Cir. 2005),
affg. T.C. Memo. 2003-163; Megibow v. Commissioner, T.C. Memo.
1998-455.
The parties dispute whether the payments at issue meet the
requirement of section 71(b)(1)(D). The parties are in agreement
that the divorce decree does not provide any conditions for the
termination of these payments. Respondent maintains that the
payments received by petitioner are gross income under section
71(a) because the payments were for separate maintenance.
Petitioner contends that the payments are not taxable because the
divorce decree did not specifically state that the payments
should terminate at the death of petitioner or her former spouse.
In 1986, however, Congress amended section 71(b)(1)(D)
specifically to remove the requirement that a divorce or
separation instrument affirmatively state that liability
Page: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011