In Gary Lee McIntee v. Commissioner, T.C. Summary Opinion 2017-48, the Tax Court held that a lump sum payment constituted alimony for tax purposes.  The summary of facts is as follows:

This case was heard pursuant to the provisions of section 7463 of the Internal Revenue Code in effect when the petition was filed.

Respondent determined a $2,588 deficiency in petitioner’s Federal income tax for the taxable year 2012. At the time the petition was filed, petitioner resided in New York.

After a concession, the only issue before the Court is whether petitioner is entitled to deduct a $10,000 payment to his ex-wife as alimony.

The Tax Court ultimately concluded that the $10,000 lump sum payment constituted alimony for tax purposes.

See full case by clicking here. 

Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.