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(A) such payment is received by (or on behalf of)
a spouse under a divorce or separation instrument,
(B) the divorce or separation instrument does not
designate such payment as a payment which is not
includible in gross income under this section and not
allowable as a deduction under section 215,
(C) in the case of an individual legally separated
from his spouse under a decree of divorce or of
separate maintenance, the payee spouse and the payor
spouse are not members of the same household at the
time such payment is made, and
(D) there is no liability to make any such payment
for any period after the death of the payee spouse and
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.
Under section 71(b)(1)(D), if the payor is liable for any
qualifying payment after the recipient’s death, none of the
related payments required will be deductible as alimony by the
payor. See Kean v. Commissioner, 407 F.3d 186, 191 (3d Cir.
2005), affg. T.C. Memo. 2003-163. 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 also Kean v. Commissioner, supra. 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 made by petitioner to Von Bergen are not deductible from
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Last modified: November 10, 2007