Michael P. Tulay - Page 6

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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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