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(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.
The test under section 71(b)(1) is conjunctive; a payment is
deductible as alimony only if all four requirements of section
71(b)(1) are present. See Jaffe v. Commissioner, T.C. Memo.
1999-196.
Section 71(b)(2) defines a “divorce or separation
instrument” as:
(A) a decree of divorce or separate maintenance or
a written instrument incident to such a decree,
(B) a written separation agreement, or
(C) a decree (not described in a subparagraph (A))
requiring a spouse to make payments for the support or
maintenance of the other spouse.
Section 71(c)(1) provides that the general inclusion rule of
section 71(a) for alimony and separate maintenance payments in
gross income does not apply to “any payment which the terms of
the divorce or separation instrument fix (in terms of an amount
of money or a part of the payment) as a sum which is payable for
the support of the children of the payor spouse.”
I. Characterization of Monthly Payments
Petitioner argues that none of the monthly payments she
received in 2002 as “unallocated maintenance and support” from
Mr. Nahhas should be included in her gross income since the
amounts are properly characterized as nontaxable child support.
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Last modified: May 25, 2011