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considered alimony, Adair determined that petitioner met the
requirements and deducted the payment on petitioner’s tax return.
In the notice of deficiency, the Internal Revenue Service
disallowed petitioner’s deduction because he “did not establish
that the amount shown was (a) alimony and (b) paid, it is not
deductible.”
Discussion
Characterization of the $35,000 Payment
The parties dispute whether the $35,000 payment at issue was
a property settlement or alimony. In the event the payment was
some form of alimony, the parties dispute whether it met the
requirement of section 71(b)(1)(D).
Property settlement payments are not deductible for tax
purposes from the income of the paying spouse. Yoakum v.
Commissioner, 82 T.C. 128, 134 (1984), and cases there cited; see
Rogers v. Commissioner, T.C. Memo. 2005-50 (applying Tennessee
law). Under section 215, a deduction is allowed for an amount
equal to alimony or separate maintenance payments paid during the
taxable year. “Alimony or separate maintenance payment” means
any alimony or separate maintenance payment that is includable in
the gross income of the recipient under section 71. Sec. 215(b).
Section 71(b)(1) defines “alimony or separate maintenance
payment” as any payment in cash if--
(A) such payment is received by (or on behalf of)
a spouse under a divorce or separation instrument,
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