DocketNumber: Docket No. 10705-77.
Citation Numbers: 39 T.C.M. 50, 1979 Tax Ct. Memo LEXIS 157, 1979 T.C. Memo. 357
Filed Date: 9/10/1979
Status: Non-Precedential
Modified Date: 11/20/2020
MEMORANDUM OPINION
IRWIN,
The only issue to be decided is whether petitioner is entitled to deduct as alimony certain amounts paid to his former wife pursuant to a divorce decree.
All of the facts have been stipulated. The stipulation of facts and the exhibits attached thereto are incorporated herein by this reference.
Petitioner, Willie R. Appling, Jr., filed his income tax returns for both years in issue with the Internal Revenue Service Center, Chamblee, Georgia. At the time he filed his petition herein, petitioner resided in Georgia.
Prior to April 3, 1974, *158 petitioner was married to Eunice K. Appling. On August 13, 1973, Eunice filed a Libel for Divorce in the Superior Court of McDuffie County, Georgia. In conjunction with this filing, the court entered a Rule Nisi ordering petitioner to show cause why he should not be required to pay temporary alimony for the support and maintenance of Eunice. No written order was entered by the court, pursuant to the show cause hearing under the Rule Nisi. The court, however, orally directed payment of attorneys' fees and awarded Eunice temporary payments of $175 per month.
On April 3, 1974, the court entered a Final Judgment and Decree of Total Divorce. The agreement provided that Eunice was awarded and granted all equity and interest of petitioner, together with fee simple title, in their residence, including all of the household goods and furnishings. It also provided that petitioner would make specific repairs to the house; that petitioner would pay Eunice $5,000 as alimony in two equal payments of $2,500 to be made April 1, 1974 and April 1, 1975; that in addition to the $5,000, petitioner would pay Eunice $175 per month for 60 months computed from September 1973, when the first such payment *159 had been made, and continuing through August 1, 1978; and, that petitioner would make immediate payment of Eunice's legal fees and court costs.
Petitioner contends that the payments to his former wife, including the costs of repairs,
The terms of the agreement do not subject the payments to any contingencies.
Petitioner contends that Georgia law,
In
[assuming] that these statutes [the same as those that are in issue here] would impose such contingencies on an award of permanent alimony, they do not impose contingencies on installment payments of a fixed or lump sum such as the $25,519.07 *165 obligation evidenced by Paragraph Nine, even where that paragraph terms the payments 'alimony.'
The settlement agreement * * * flatly states that taxpayer is to pay Shara the sum of $25,519.07. * * * Hence the $25,519.07 obligation is a lump sum settlement, precluding taxpayer under Georgia law from importing the "contingencies" of
Our reading of
In this Court's opinion in
In
Since it appears that the agreement did effect a division of property between the parties, provided for monthly payments over a six-year period, released the husband from any claim of alimony and did not expressly provide for alimony, it must be concluded that the $300 monthly payments were in satisfaction of petitioner's obligation to support his former wife. As such, the payments are within the definition of alimony under Georgia law.
Accordingly, since the payments were subject to a contingency under Georgia law and in the nature of alimony, * * * the payments will be treated as periodic. * * *
In light of these cases, we must decide whether the various payments in issue here are subject to contingencies under Georgia law.
We believe that the payments to be made for repairs to the house constitute part of a property settlement and are not subject to the statutory contingencies. Clearly, the award of the house to Eunice constituted a property settlement. Payments for the repairs were directly related to the residence and, as respondent contends, were obviously designed to insure its fitness. These payments are not in the *169 nature of alimony of an allowance of support. *170 showing that such payments were alimony, subject to the statutory contingencies and not part of the property settlement which included awarding Eunice the home.
Finally, we must deal with the two payments of $2,500. On the evidence before us, we do not believe petitioner has shown that these payments are in the nature of alimony or subject to the statutory contingencies. We have already determined that the monthly payments of $175 were to provide for Eunice's support. There is nothing in the record to indicate that these payments were meant to provide additional support for Eunice in the first two years of the divorce beyond the monthly payments of $175. For this reason, we must hold that such payments are in the nature of a property settlement or lump sum alimony, not subject to the statutory contingencies. Accordingly, no deduction is allowed.
1974 | 1975 | |
Monthly payments of $175 | $2,100 | $2,100 |
Payments in discharge of | 2,500 | 2,500 |
$5,000 sum | ||
Payments made for repairs | 1,046 | |
on home (not claimed | ||
on return but claimed | ||
in petition.) |
2. The parties have stipulated that Eunice would testify that the payments in question were part of a property settlement and there was no intention for any of them to be considered alimony and that petitioner and his attorney would testify that they intended and considered such sums to be alimony. We cannot, on this basis, determine the intent of the parties.↩
3. All statutory references are to the Internal Revenue Code of 1954, as in effect during the taxable years in issue.↩
4.
5. We note that there is no material difference for Federal tax purposes between a decree where the total amount payable is so stated and one where it is necessary to multiply the payments by a period certain in order to determine the principal sum specified.
6.
7. Since
8. Although designated as alimony, as noted previously, such designation is not dispositive. ↩
9. One factor courts have looked to in determining whether a payment is alimony is the similarity of payments before and after entry of the divorce decree. See
Morris v. Padgett , 233 Ga. 750 ( 1975 )
Elizabeth H. Bardwell v. Commissioner of Internal Revenue , 318 F.2d 786 ( 1963 )
Eastland v. Candler , 226 Ga. 588 ( 1970 )
Bennett v. Bennett , 236 Ga. 764 ( 1976 )
Newell v. Newell , 237 Ga. 708 ( 1976 )
Herbert v. Huggins , 231 Ga. 489 ( 1973 )
Bisno v. Bisno , 239 Ga. 388 ( 1977 )
David M. Stock and Janet B. Stock v. Commissioner of ... , 551 F.2d 614 ( 1977 )