                     T.C. Summary Opinion 2007-114



                        UNITED STATES TAX COURT



                    THOMAS LETTIERI, Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



        Docket No. 13055-06S.              Filed July 3, 2007.



     Thomas Lettieri, pro se.

     Travis T. Vance, for respondent.


     COHEN, Judge:     This case was heard pursuant to the

provisions of section 7463 of the Internal Revenue Code in effect

when the petition was filed.    Pursuant to section 7463(b), the

decision to be entered is not reviewable by any other court, and

this opinion shall not be treated as precedent for any other

case.

     Respondent determined a deficiency of $3,000 in petitioner’s

Federal income tax for 2004.    The sole issue for decision is
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whether payments totaling $12,000 made by petitioner to his

former spouse in 2004 are alimony payments as defined by section

71(b) and thus deductible by petitioner under section 215(a).

Unless otherwise indicated, all section references are to the

Internal Revenue Code in effect for the year in issue.

                            Background

     Some of the facts have been stipulated, and the stipulated

facts are incorporated in our findings by this reference.

Petitioner resided in Newnan, Georgia, at the time he filed his

petition.

     Petitioner married Gretchen Von Bergen (Von Bergen) on

June 24, 1972.   On July 12, 2002, Von Bergen filed for divorce

from petitioner in the State of Georgia.   On that day, petitioner

and Von Bergen signed a document entitled “Divorce Settlement

Agreement Between Gretchen Von Bergen Lettieri and Thomas

Lettieri, July-August 2002” (settlement agreement).

     The settlement agreement states:

     Husband * * * and Wife * * * have distributed by their
     mutual agreement their household furnishings; have sold
     their real estate and split equally the proceeds; and
     have paid in full their debts.

     Husband agrees to transfer to Wife’s TIAA-CREF
     Retirement Fund the total sum (approximately $69,000)
     in his * * * Pension Plan. This transaction is to take
     place within one month of the Divorce decree.

     Husband will pay to Wife in $1000/mo. increments (or
     more should he choose) the sum of $66,000. These
     payments are to be received by the 16th of the month
     (late fee: $5/day).
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     Husband and Wife will share equally in agreed upon
     expenses related to their three non-minor children,
     including the education of their 18-year-old. There
     are no minor children.

The settlement agreement is silent as to whether the payments are

to terminate upon the death of either party.

     In 2004, petitioner made payments to Von Bergen pursuant to

the settlement agreement totaling $12,000.   He deducted those

payments as alimony on his 2004 income tax return.   Von Bergen

did not include the $12,000 payments received from petitioner as

alimony income on her 2004 return.

                             Discussion

     The parties dispute whether the payments made by petitioner

to Von Bergen are alimony and thus deductible by petitioner under

section 215.   Resolution of this dispute depends on whether the

payments, as a matter of law, terminate on the death of Von

Bergen.

     Section 215(a) provides a deduction to an individual equal

to the alimony or separate maintenance payments paid during that

individual’s taxable year.   Section 215(b) defines alimony as any

payment that is includable in the gross income of the payee under

section 71.    Section 71(a) provides for the inclusion in income

of any alimony or separate maintenance payments received during

the taxable year.   Section 71(b)(1) defines “alimony or separate

maintenance payment” as any payment in cash if--
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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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petitioner’s income as alimony under section 215(a) because the

obligation to make the payments does not terminate at the death

of either party under Georgia law.       Petitioner contends that the

payments are deductible because he intended the payments to be

alimony and because the settlement agreement did not specifically

state that the payments do not terminate at the death of

petitioner or Von Bergen.

       Although section 71(b)(1)(D), as it was enacted in 1984,

originally required that a divorce or separation instrument

affirmatively state that liability for payments terminate upon

the death of the payee spouse in order to be considered alimony,

the statute was retroactively amended in 1986 so that such

payments now qualify as alimony as long as termination of such

liability would occur upon the death of the payee spouse by

operation of State law.     Hoover v. Commissioner, 102 F.3d 842,

845-846 (6th Cir. 1996), affg. T.C. Memo. 1995-183.

       Under Georgia law, the obligation to pay periodic alimony

terminates at the death of either party, while the obligation to

pay lump sum alimony in installments over a period of time does

not.    Winokur v. Winokur, 365 S.E.2d 94, 95 (Ga. 1988).     The

Georgia Supreme Court has held that the obligation to pay lump

sum alimony does not terminate upon the death of either party

because lump sum alimony is in the nature of a property

settlement, regardless of whether it is designated as alimony.
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Id.   The Georgia Supreme Court has also established the following

test to be used in determining whether particular payments are

lump sum alimony payable in installments, as opposed to periodic

alimony:   “If the words of the documents creating the obligation

state the exact amount of each payment and the exact number of

payments to be made without other limitations, conditions or

statements of intent, the obligation is one for lump sum alimony

payable in installments.”   Id. at 96.

      The settlement agreement between petitioner and Von Bergen

requires petitioner to pay “the sum of $66,000” to Von Bergen in

monthly payments of at least $1,000.     Although the exact number

of payments would have varied if petitioner had paid more than

the minimum $1,000 in any installment, petitioner was not legally

obligated to pay to Von Bergen any more than “the sum of

$66,000”; if petitioner did not have the option in the settlement

agreement of paying more than the required $1,000 each month, he

would have been required by the settlement agreement to pay Von

Bergen exactly 66 payments of $1,000 each.    Petitioner’s

obligation to Von Bergen is for an exact sum payable in monthly

installments, which obligation is lump sum alimony under Georgia

law and does not terminate upon the death of either the payee or

the payor.   Thus, we hold that the $12,000 paid to Von Bergen in

2004 pursuant to the settlement agreement between petitioner and

Von Bergen does not qualify to be deducted as alimony paid by
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petitioner under section 215.    Sec. 71(b)(1)(D); see Mukherjee v.

Commissioner, T.C. Memo. 2004-98.

     To reflect the foregoing,


                                              Decision will be entered

                                         for respondent.
