                       T.C. Memo. 2004-98



                     UNITED STATES TAX COURT



                  JAY MUKHERJEE, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 13523-02.               Filed April 7, 2004.


     D. Robert Autry, Jr., for petitioner.

     Nancy E. Hooten, for respondent.



                       MEMORANDUM OPINION


     WELLS, Chief Judge:    Respondent determined a deficiency in

the amount of $17,400 in petitioner’s Federal income tax for

2000. The sole issue for decision is whether petitioner is

entitled to deduct under section 215 as alimony a payment that he

made to his former wife pursuant to the judgment of a State court

entered on a jury’s verdict in their divorce proceedings awarding
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her “lump sum alimony”.    This case was submitted fully stipulated

under Rule 122.1    The stipulation of facts and the attached

exhibits are incorporated herein by this reference.

Background

     At the time he filed his petition, petitioner resided in

Atlanta, Georgia.

     In 1997, petitioner married Rinku Mukherjee.       Sometime in

1999, petitioner filed a petition for divorce with the Superior

Court of DeKalb County, State of Georgia (the Georgia Superior

Court).   Mrs. Mukherjee then counterclaimed, asking, among other

things, for an equitable division of petitioner’s property and a

substantial alimony settlement.

     In June 2000, the above matters in the Georgia Superior

Court divorce proceedings came to trial before a jury.       At the

end of the trial, the jury was instructed to render its verdict

by making findings as to a set of interrogatories in the special

verdict form that was provided to the jury.    Among other things,

in the verdict it rendered on June 22, 2000, the jury, found, in

pertinent part:

     (3) As to the issue of EQUITABLE DISTRIBUTION OF
     PROPERTY, We the jury, find as follows:

             X     for the Husband (no award to Wife)



     1
      All Rule references are to the Tax Court Rules of Practice
and Procedure, and all section references are to the Internal
Revenue Code in effect for the year at issue.
                                - 3 -

                           OR

           _____ for the Wife in the following amount:
                  ____________

     (4) As to the issue of LUMP SUM ALIMONY, We, the jury,
     find as follows:

                 for the Husband (no award to Wife)

                           OR

             X   for the Wife in the following amount:
                  $55,000

     On July 17, 2000, the Georgia Superior Court issued its

Final Judgment and Decree of Divorce.   This July 17, 2000, Final

Judgment noted and expressly incorporated therein the jury’s

verdict.   It further, among other things, required petitioner to

pay petitioner’s former wife as alimony $55,000 in cash, “lump

sum”.

     As required by the jury verdict, petitioner paid $55,000 to

his former wife on August 1, 2000.

     On his return for 2000, petitioner claimed and deducted the

$55,000 paid to his former wife as alimony under section 215.

     In the notice of deficiency issued to petitioner, respondent

disallowed the $55,000 deduction for alimony paid that petitioner

claimed.

Discussion

     Section 215(a) allows an individual taxpayer a deduction for

the alimony or separate maintenance payments made during that

taxpayer’s taxable year.   For purposes of section 215, “alimony
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or separate maintenance payment” means any alimony or separate

maintenance payment (as defined in section 71(b)) that is

includable in the gross income of the recipient under section 71.

Sec. 215(b).

     Section 71 provides in pertinent part:

     SEC. 71. ALIMONY AND SEPARATE MAINTENANCE PAYMENTS.
       (a) General Rule.--Gross income includes amounts
     received as alimony or separate maintenance payments.

       (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 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.

         *        *      *      *       *      *       *
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       (e) Exception for Joint Returns.--This section and section
     215 shall not apply if the spouses make a joint return with
     each other.

     In the instant case, except for the requirements of section

71(b)(1)(D), the parties agree that the $55,000 payment by

petitioner meets all other requirements for deduction under

sections 215 and 71.    The parties here disagree only as to

whether petitioner’s obligation to make the payment would have

survived petitioner’s former wife’s death, in the event that she

died prior to petitioner’s paying her on August 1, 2000.

     In section 71(b)(1)(D), Congress recognized that payments

would be for the support of the payee spouse only if they related

to a period before her death, and that payments for periods after

her death would not provide such support.    Accordingly, Congress

imposed the section 71(b)(1)(D) requirements (i.e., that the

obligation to make such alimony or separate maintenance payments

terminate immediately upon the death of the payee spouse) in

order to prevent the deduction of amounts that are in effect

transfers of property unrelated to the support needs of the

recipient spouse.      Hoover v. Commissioner, 102 F.3d 842, 845-846
(6th Cir. 1996) (citing H. Rept. 98-432 (part 2), at 1496

(1984)), affg. T.C. Memo. 1995-183.

     As originally enacted in 1984, section 71(b)(1)(D) required

that the divorce or separation instrument include a provision

that any obligation or liability to make payments of alimony or

separate maintenance would terminate with the payee spouse’s
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death.   In 1986, section 71(b)(1)(D) was retroactively amended so

that such payments now qualify as long as termination of such

liability would occur by operation of State law.   Hoover v.
Commissioner, supra at 845-846.

     Under Georgia law, the obligation of a payor spouse to pay

“lump sum alimony” to the payee spouse does not cease upon the

payee spouse’s death, because the Georgia courts have held that

“lump sum alimony” is in the nature of a property settlement,

regardless of its designation as alimony instead of a property

settlement.   Winokur v. Winokur, 365 S.E.2d 94, 95 (Ga. 1988).

Such “lump sum alimony” may be paid either at once or in

specified installments.   Id. at 96; Stone v. Stone, 330 S.E.2d

887 (Ga. 1985).

     In contrast to “lump sum alimony”, under Georgia law, the

obligation to pay periodic alimony terminates upon either the

death of the payor spouse or the death of the payee spouse.

Winokur v. Winokur, supra at 94.
     In Winokur, the Georgia Supreme Court further specified the

rule to be utilized in determining whether particular payments in

question are “lump sum alimony”, as opposed to periodic alimony.

It stated that “If the words of the documents creating the

obligation state 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.
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     As indicated previously, the parties here disagree over

whether petitioner’s obligation to pay the $55,000 to his former

wife would have survived the former wife’s death prior to

petitioner’s effectuating payment of the $55,000 to her on August

1, 2000.   Petitioner concedes that the jury’s verdict does not

specifically state whether or not his payment obligation to his

former wife would terminate with her death.   Nonetheless,

petitioner contends that, under Georgia law, his obligation to

pay the $55,000 to petitioner’s former wife would have terminated

upon his former wife’s death, because the $55,000 award is

periodic alimony.   He argues that if the jury intended the

payment obligation to be nonterminable, the jury’s verdict should

have instead specifically referred to the $55,000 award as a

property settlement.   Petitioner also maintains that construing

the $55,000 to be “lump sum alimony”, under Georgia law,

conflicts with the jury’s other finding awarding to his former

wife nothing from him as an equitable property distribution.

     Respondent, on the other hand, contends that the $55,000 is

“lump sum alimony” under Georgia law, and that petitioner’s

obligation to pay her the $55,000 would not have terminated with

his former wife’s death.   We agree with respondent.

     Contrary to petitioner’s argument, the jury’s verdict

specifically referred to and described the $55,000 award to be

paid petitioner’s former wife as “lump sum alimony”.   In

accordance with the verdict, in its July 17, 2000, Final

Judgment, the Georgia Superior Court required petitioner pay her
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$55,000 as alimony, “lump sum.” Hence, under Georgia law,

petitioner’s obligation to pay the $55,000 would not have

terminated upon his former wife’s death prior to his making

actual payment to her on August 1, 2000.     Winokur v. Winokur,

supra at 94-96; cf. Bisno v. Bisno, 236 S.E.2d 755 (Ga. 1977)

(divorce agreement construed to provide for payment of terminable

periodic alimony to wife where parties therein stated those

alimony payments were intended to be deductible by the husband

for Federal income tax purposes and where payments would

otherwise not qualify to be deducted if husband’s obligation to

make those payments was nonterminable).    Accordingly, we hold

that the $55,000 lump-sum payment petitioner made to his former

wife does not qualify to be deducted as alimony paid by him under

section 215.   Sec. 71(b)(1)(D); Preston v. Commissioner, T.C.

Memo. 1999-49, affd. on this issue 209 F.3d 1281, 1285 (11th Cir.

2000); see also Human v. Commissioner, T.C. Memo. 1998-65.

     To reflect the foregoing,

                                      Decision will be entered

                                 for respondent.
