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Husband and Wife will share equally in agreed upon
expenses related to their three non-minor children,
including the education of their 18-year-old. There
are no minor children.
The settlement agreement is silent as to whether the payments are
to terminate upon the death of either party.
In 2004, petitioner made payments to Von Bergen pursuant to
the settlement agreement totaling $12,000. He deducted those
payments as alimony on his 2004 income tax return. Von Bergen
did not include the $12,000 payments received from petitioner as
alimony income on her 2004 return.
Discussion
The parties dispute whether the payments made by petitioner
to Von Bergen are alimony and thus deductible by petitioner under
section 215. Resolution of this dispute depends on whether the
payments, as a matter of law, terminate on the death of Von
Bergen.
Section 215(a) provides a deduction to an individual equal
to the alimony or separate maintenance payments paid during that
individual’s taxable year. Section 215(b) defines alimony as any
payment that is includable in the gross income of the payee under
section 71. Section 71(a) provides for the inclusion in income
of any alimony or separate maintenance payments received during
the taxable year. Section 71(b)(1) defines “alimony or separate
maintenance payment” as any payment in cash if--
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Last modified: November 10, 2007