Neil Jerome Proctor - Page 6




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          II. Alimony                                                                 
               Respondent contends that the retirement payments are part of           
          a property settlement and do not qualify as alimony.  An                    
          individual may generally deduct payments made to a spouse during            
          the taxable year to the extent that those payments are alimony              
          includable in the spouse’s gross income.  See sec. 215(a) and               
          (b).  Section 71(a) requires amounts received as alimony to be              
          included in gross income.                                                   
               In order to qualify as alimony, payments must meet the                 
          requirements of section 71(b)(1)(A) through (D).  Ms. Holdman               
          received the retirement payments pursuant to a divorce decree.              
          Thus, such payments meet the requirements of section 71(b)(1)(A).           
          In addition, petitioner and Ms. Holdman resided in separate                 
          households at the time the payments were made.  Thus, such                  
          payments also meet the requirements of section 71(b)(1)(C).                 
          Respondent contends that the retirement payments do not, however,           
          meet the requirements of section 71(b)(1)(B) and (D).                       
               Section 71(b)(1)(B) requires that the divorce instrument               
          “not designate such payment as a payment which is not includible            
          in gross income under this section and not allowed as a deduction           
          under section 215”.  Respondent contends that this prong is not             
          met because the divorce decree refers to the payments as part of            
          a division of the marital property.  The classification of a                








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