                   T.C. Summary Opinion 2007-92



                      UNITED STATES TAX COURT



         KENNETH W. AND WALDRAUT N. HINSON, Petitioners v.
            COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 12422-06S.             Filed June 7, 2007.


     Kenneth W. Hinson, pro se.

     Lynn M. Curry, for respondent.



     ARMEN, Special Trial Judge:   This case was heard pursuant to

the provisions of section 7463 of the Internal Revenue Code in

effect when the petition was filed.1   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.


     1
        Unless otherwise indicated, all subsequent section
references are to the Internal Revenue Code in effect for 2003.
                                - 2 -

     Respondent determined a deficiency in petitioners’ Federal

income tax for 2003 of $2,076.50.    The sole issue for decision is

whether Kenneth W. Hinson properly deducted $7,200 paid to his

ex-wife in 2003 as alimony under section 71(b).   We hold that he

did not.

                              Background

     Some of the facts have been stipulated, and they are so

found.   We incorporate by reference the parties’ stipulation of

facts and accompanying exhibits.

     At the time the petition was filed, Kenneth W. Hinson

(petitioner) and Waldraut N. Hinson resided in Ponte Vedra Beach,

Florida.2

     Petitioner and Linda Hinson were married in December 1969

and divorced in March 1993.    The Final Judgment of Dissolution of

Marriage (divorce decree) provided that, inter alia, petitioner

was to pay his ex-wife $1,200 per month in “rehabilitative

alimony” until June 30, 1996.    The divorce decree also provided

that petitioner was to pay his ex-wife a total of $72,000 in

“lump-sum alimony”, payable in installments of $600 per month,

beginning July 1, 1996, and ending June 30, 2006.   The divorce



     2
        Although Kenneth and Waldraut Hinson petitioned the Court
in response to respondent’s notice of deficiency, only Mr. Hinson
appeared at trial. Further, the sole issue presented in this
case concerns payments Mr. Hinson made to his ex-wife in 2003.
Therefore, as a matter of convenience, we refer to Mr. Hinson
alone as petitioner.
                                - 3 -

decree did not specify whether petitioner’s obligation to make

these payments would terminate upon his ex-wife’s death.

      In 2003, petitioner paid his ex-wife $7,200 in monthly

installments per the divorce decree.      Respondent contends that

these payments did not qualify as alimony under the Internal

Revenue Code.

                            Discussion3

      Section 71(a) provides the general rule that alimony

payments are included in the gross income of the payee spouse;

section 215(a) provides the complementary general rule that

alimony payments are tax deductible by the payor spouse in “an

amount equal to the alimony or separate maintenance payments paid

during such individual’s taxable year.”

      The term “alimony” means any alimony as defined in section

71.   Section 71(b) provides:

           SEC. 71(b). Alimony or Separate Maintenance
      Payments Defined.--For purposes of this section–

                (1) In general.–-The term “alimony or
           separate maintenance payment” means any
           payment in cash if–

                     (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


      3
        The issue for decision is essentially legal in nature;
accordingly, we decide it without regard to the burden of proof.
                                - 4 -

                includable in gross income * * * 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.

     Both parties agree that petitioner’s payments to his ex-wife

satisfied the requirements set out in section 71(b)(1)(A), (B),

and (C).   Payment was made in cash, made pursuant to a “divorce

or separation instrument” as described in section 71(b)(2)(C),

and the payment was not ineligible for the section 71 and 215

deduction/inclusion scheme.    At the time of payment, petitioner

and his ex-wife were not members of the same household.     The

disagreement in this case is solely about whether petitioner’s

payments satisfied section 71(b)(1)(D); i.e., whether

petitioner’s liability to make payments would have terminated in

the event of his ex-wife’s death.    If the payments would have

terminated in the event of his ex-wife’s death, the payments

would have been “alimony”.    Because it seems clear that

petitioner’s payments would not have terminated in the event of
                                 - 5 -

his ex-wife’s death, we agree with respondent that the payments

were not alimony.

     As petitioner’s divorce decree is silent on whether his

monthly payments to his ex-wife would survive her death, our

analysis is guided by Florida State law.    “Although Federal law

controls in determining petitioner’s income tax liability * * *,

State law is necessarily implicated in the inquiry inasmuch as

the nature of petitioner’s liability for the payment” was based

in Florida law.     Berry v. Commissioner, T.C. Memo. 2000-373,

affd. 36 Fed. Appx. 400 (10th Cir. 2002); see also, e.g., Sampson

v. Commissioner, 81 T.C. 614, 618 (1983), affd. without published

opinion 829 F.2d 39 (6th Cir. 1987).     In Commissioner v. Estate

of Bosch, 387 U.S. 456, 465 (1967), the Supreme Court addressed

the means for determining State law in the context of a Federal

tax case and stated that “the State’s highest court is the best

authority on its own law.”

     Florida’s alimony statute specifically permits a trial court

to award alimony in the form of periodic payments, lump-sum

payments, or both.    See Fla. Stat. Ann. sec. 61.08(1) (West

2006).   “By definition, ‘lump-sum alimony’ is a fixed and certain

amount, the right to which is vested in the recipient and which

is not therefore subject to increase, reduction, or termination

in the event of any contingency, specifically including those of

death or remarriage.”     Boyd v. Boyd, 478 So. 2d 356, 357 (Fla.
                               - 6 -

Ct. App. 1985).   According to the Florida Supreme Court, an award

of lump-sum alimony survives the death of both the obligor and

the obligee.   See Canakaris v. Canakaris, 382 So. 2d 1197, 1201

(Fla. 1980); see also Fla. Stat. Ann. sec. 61.075(2) (West 2006);

Filipov v. Filipov, 717 So. 2d 1082, 1084 (Fla. Ct. App. 1998).

Thus, it seems clear that an award of lump-sum alimony in this

case would not meet the requirement of section 71(b)(1)(D) for

deduction eligibility.

      Petitioner argues that the label of “lump-sum alimony” in

his divorce decree should not be conclusive.   Accordingly, he

directs us to caselaw discussing the reasons behind a typical

award of lump-sum alimony and points to the differences between

his situation and the cases cited by respondent.   Although

applying the principle of substance over form is often

appropriate, this Court is not in a position to review the trial

court’s specific award of “lump-sum alimony”, nor is it our place

to second-guess the award’s function on the record we have before

us.

      Accordingly, we hold that petitioner’s deduction of the

$7,200 paid to his ex-wife in 2003 was improper as it did not

meet the definition of “alimony” under section 71(b)(1)(D).

      To reflect our disposition of the disputed issue,

                                         Decision will be entered

                                    for respondent.
