Neil Jerome Proctor - Page 5

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          I.   Child Support                                                          
               An individual may generally deduct payments made to a spouse           
          during the taxable year to the extent those payments are alimony            
          includable in the spouse’s gross income.  See sec. 215(a) and               
          (b).  Any payment which the terms of the divorce decree fix as a            
          sum payable for the support of children is not alimony.  See sec.           
          71(c)(1).  If any payment is less than the amount specified in              
          the divorce decree, to the extent the payment does not exceed the           
          amount required to be paid for child support, such amount shall             
          be considered support.  See sec. 71(c)(3).  Pursuant to the                 
          divorce decree, petitioner was required to pay Ms. Holdman $8,000           
          by the end of 2002 with respect to his children’s uninsured                 
          medical expenses and Ms. Holdman’s share of his retirement pay              
          (i.e., $2,687 relating to his children’s uninsured medical                  
          expenses and $5,313 relating to Ms. Holdman’s share of his                  
          retirement pay).  Petitioner started making payments in 2002.  In           
          that year, petitioner made lump-sum payments to Ms. Holdman                 
          totaling $6,074 (i.e., $1,926 less than the amount required                 
          pursuant to the divorce decree).  Accordingly, $2,687 of the                
          $6,074 paid by petitioner in 2002 is, pursuant to section                   
          71(c)(3), child support and cannot be deducted as alimony.  See             
          Blyth v. Commissioner, 21 T.C. 275 (1953).  We must determine               
          whether the remaining $3,397 is alimony.                                    

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