T.C. Summ ary Opi ni on 20 14 -9 4

UNITED STAT ES TAX COURT

KENNET H RUSSELL LAREMORE, Pet it io ne r v. C OMMI SSIONER OF

INTERNAL REVENU E, Resp on de nt

Doc ke t No . 15 73 7- 12 S. Fi le d S ep te m be r 18 , 20 14
. Ken ne th Ru ss el l Lare m or e, fo r hi m se lf. Edwar d J . Laub ach , Jr., fo r res po nd en t.

SUMM ARY OPINION GUSTAFSON, Ju dg e: Thi s ca se was h eardpu rs ua ntto th e p ro vi si on s o f
se ct io n 7 46 3 ineffe ctwhenth e p et it io n was fil ed . Purs ua ntto sec ti on 74 63 (b ),

1

Unl es s o th erwi se in di cat ed , all sec ti on refe ren ces are t o t he Int ern al 1 Rev enue Co de of 1 98 6 a s i n e ffec t fo r th e y ear i n i ss ue (co di fie d i n 2 6 U.S.C., an d refe rredto he rei n a s “ th e Co de ”), an d a ll Ru le refe ren ces are t o t he Tax C ou rt Ru le s o f Prac ti ce an d P ro cedur e.- 2 -

th e d eci si on to be en te redis no t re vi ewab le by any ot he r co urt, an d t hi s o pi ni on sh al l n otbe tre at edas p rece de ntforan y ot he r cas e. The Int ern al Rev enue Serv ic e (“ IRS” ) de te rm in eda de fic ie nc y of $ 12 ,44 8 in th e 2 00 9 F ed eral in co m e ta x o f pe ti ti on er Ken ne th Larem or e. The i ss ue for de ci si on is whet he r Mr. Lare m or e m ay de du ctas a li m on y

$4 8,9 21 th athe pa idto hi s fo rm er s po us e dur in g 2 00 9 i n s at is fact io n o f a jud gm en t. We ho ldth athe m ay
no t, b ecau se hi s o bl ig at io n u nd er the di vo rce i ns tru m en t wo ul d n othave te rm in at edup on hi s ex -wif e’s de ath, fo r pu rp os es of s ect io n 7 1( b) (1 )(D). FINDINGS OF FACT The pa rti es subm it te d t hi s i ss ue ful ly sti pu la te d p ur su an t t o R ul e 1 22 , refl ect in g t he ir a gr eem en t tha t the rel ev an t fa ct s co ul d b e p res en te d wi th ou t a t ria l. The st ip ul at io n o f fac ts fil edDecem be r 3, 2 01 3, an d the att ach edex hi bi ts are in co rp or at edhe rei n b y

th is refe ren ce. Mr. Lar em or e res id edinPen ns y lv an iaat th e ti m e h e fi le d h is pe ti ti on . Pro pe rty set tl em en t ag reem en t Mr. Lare m or e m arri edLin daGon so wsk i i n 1 97 5, an d t he y were g ran te d a jud gm en t o f di vo rce i n t he Sta te of Ne w Yorkin20 06 . As pa rt o f th e jud gm en t o f di vo rce, M r. an d M rs . Larem or e ag reedto a st ip ul at io n o f se tt le m en t wh ic h was
en te redof r eco rddurin g aco urt h eari ng .- 3 -

Mai nt en an ce p aym en ts The st ip ul at io n o f se tt le m en t p ro vi de d fo r Mr. Lare m or e to m ak e m on th ly
m ai nt en an ce p aym en ts of $ 1,2 50 to hi s ex -wif e co m m en ci ng June 1, 2 00 6, an d
co nt in ui ng un ti l M rs . Larem or e’s de ath o r rem arri ag e. Sp eci fic al ly, th e p art ie s ag reedth atth e p aym en ts of $ 1,2 50 “ wil l b e ta xabl e, of co ur se , to th e wif

e; tax de du ct ib le to th e hus bandpu rs ua ntto IRS ru le s.” (Th ere i s n o d is pu te inth is cas e th atMr. Lare m or e m ay

de du ctth os e am ou nt s fo r in co m e ta x p ur po se s.) Oth er p ro pe rty Pu rs uantto th e st ip ul at io n o f se tt le m en t, Mr . andMrs . Larem or e m ad e
se ve ral ag reem en ts reg ard in g t he di vi si on of t he ir m ari ta l as se ts . They ag reedto
se ll th ei r res id en ce an d s pl itth e n etpro ceed s equa ll y . They al so ag reedto di vi de th ei r joi ntba nkacco un ts equa ll y , with M r. Larem or e ag reei ng to gi ve Mrs . Larem or e 5 0% o f th e fu nd s i n aba nkacco un t h e h el d i nd iv idua ll y . Als o i n the st ip ul at io n o f se tt le m en t, an d p ert in en t t o t hi s ca se , th e co up le ag reedto “ di vi de [] equ al ly” th ei r ret ire m en t ac co un ts , “ so th atth e n etres ul t i s tha t th ey [wou ld ] en d up wi th equa l d ol la rs .” (Em ph as is ad de d.) Th e st ip ul at io n o f
se tt le m en t p ro vi de d:

The va lu e o f Mr. Lare m or e’s IRA’s, ov er Mr s. Lare m or e’s, is $7 7,7 30 .48 . The ag reem en t i s tha t s he wil l g etha lf o f th atsu m for- 4 -

$3 8,8 65 .24 vi a a QDRO be in g p la cedonMr. Lare m or e’s tr ad it io na l [ 2 ] IRA s o t ha t tha t am ou ntwil l b e tr an sf erre d t o h er an d t he en d re su ltis th atth e p art ie s wi ll ha ve equa ll y sh aredth es e ret ire m en t ac co un ts . [Em ph as is ad de d.] Dur in g abri ef d is cu ss io n h el d o ff the reco rd , th e p art ie s re al iz edth atth ei r
res pe ct iv e num

be rs forth e v ari ou s re ti rem en t ac co un ts di d n otpre ci se ly m at ch
. Addres si ng th e m at te r on th e rec or d, d iv or ce co un se l fo r Mr. Lare m or e st at ed :

W e’re reco gn iz in g t ha t the nu m be rs on th e IRA’s o r ret ire m en t acco un ts m ay

be sl ig ht ly off, b utth e co nc ep t h ere i s tha t wh at ev er was inth os e acc ou nt s atco m m en cem en t, p lu s the gro wth onth em , equa ll y be lo ng s t o t he pa rti es . * * * Andso to th e ex te ntth atwe ne edto lo okat s ta te m en ts an d d o a li tt le twea ki ng on th e num be r, we wil l, b utth e co nc ep t o f wha t we’re do in g i s the re. [Em

ph as is ad de d.] Div or ce d ecre e The st ip ul at io n o f se tt le m en t was in co rp or at edby referen ce i nt o t he di vo rce de cree , inwhi chitwas- -

A “ QDRO” is a “ qu al ifi eddo m es ti c rel at io ns ord er” a s d efi ne d i n 2 se ct io n 4 14 (p ), whi chis is su edinth e co nt ex t o f a d iv or ce o r se parat io n. A QDRO pe rm it s a p orti on of atax -ad va nt ag edret ire m en t p la n, s uc h a s anin di vi du al ret ire m en t ac co un t (“ IRA”) , see sec . 40 8, t o b e tr an sf erre d fr om

on e d iv or ci ng sp ou se to th e o th er wi th ou t the tra ns ferr in g s po us e’s in cu rri ng a ta x l iabi li ty on the am ou nttra ns ferr ed . There aft er, the rece iv in g s po us e o wns th e p orti on tra ns ferr ed an d wi ll owe a ny inc om e ta x l iabi li ty aris in g fr om withdrawal s o f fu nd s o utof t he acco un t.- 5 - ORDERED AND AD JUDGED, th atth e st ip ul at io n o f se tt le m en t d at edMay 25, 2 00 6, en te redin to be twee n t he pa rti es a co py of th e tr an sc rip t o f whi chis att ach edto an d i nc or po rat edinth is jud gm en t b y

refe ren ce, s ha ll su rv iv e an d s ha ll no t b e m erg edinth is jud gm en t, an d t he pa rti es he reb y are d ire ct edto co m

pl y with e ve ry le ga ll y en fo rceabl e te rm

an d p ro vi si on of s uc h s ti pu la ti on as i f su ch te rm or p ro vi si on were s etforth init s en ti rety he rei n * * *
. Afte r th e d iv or ce was fin al iz ed , Mr. Larem or e m ov edto Pen ns y lv an ia
. 20 09 pa ym en ts un de r th e st ip ul at io n o f se tt le m en t If ev en ts ha d p ro ceed edas a gr eed , rou gh ly $38 ,00 0 wo ul d h av e b eenrol le d
ov er fro m Mr. Lare m or e’s IRA m an ag edby V an gu ardFund s (“ Van gu ard ”)-- witho uttax li ab il it y

accrui ng to hi m --i nt o a n IRA own edby Mrs. Lare m or e. The reaf te r, sh e wou ldha ve bo rn e th e in co m e ta x l iabi li ty on wi th dr awal s o f th at
m on ey . Bu t ev en ts di d n otpro ceeden ti rel y as a gr eed . Mr. Larem or e d idpa y Mrs . Larem or e h er m ai nt en an ce p aym en ts (whi chin20 09 to ta le d $ 15 ,00 0)
. Howev er, al th ou gh th ei r di vo rce was fin al in20 06 , Mrs . Larem or e d idno t re cei ve th e ag reed -upo n s um

of $ 38 ,86 5 fo r th e equa l d iv is io n o f th ei r ret ire m en t ac co un ts
un ti l 2 00 9. Fro m 20 07 to 20 09 Mrs . Larem or e’s co un se l at te m pt edon th ree o ccas io ns -- bu t atanap pa ren tl y

sl ow p ace- -to fil e th e QDROs, yet al l thr ee at te m pt s h ad
va rio us de fect s. Ra th er tha n c on ti nu in g h er at te m pt s t o fi le a QDRO,- 6 -

Mrs . Larem or e su edMr. Lare m or e in Su ffo lkCo un ty, New York ; an d o n M ay 5, 20 09 , a jud gm en t was en te redag ai ns t M r. Larem or e. Mrs . Larem or e d ire ct edth at th e jud gm en t b e tr an sf

erre d t o M r. Larem or e’s ho m e St at e o f Pen ns y lv an iain
or de r to en fo rce i t ag ai ns t h im . On Nov em be r 30 , 20 09 , Vang ua rdpa idhe r $4 8,9 21 (in cl ud in g $ 10 ,05 6 i n p en al ty int eres t) f ro m Mr. Lare m or e’s no n- IRA
acco un ts inful l s at is fact io n o f th e jud gm en t. Not ic e o f de fic ie nc y On h is 20 09 Fo rm

10 40 , “U.S. Ind iv idua l In co m e Tax Return” , Mr. Lare m or e cl ai m edanali m on y de du ct io n o f $6 3,9 21 forhi s p aym en ts to hi s
ex -wif e in 20 09 . Res po nd en t co nc ed es th at$1 5,0 00 of t hi s amoun t co ns is ts of t he
se pa rat e m ai nt en an ce p aym en ts pro vi de d fo r in th e st ip ul at io n o f se tt le m en t an d i s de du ct ib le as a li m on y . By a st atut ory

no ti ce o f de fic ie nc y

da te d M ay

21 , 20 12 , th e IRS di sa ll owe d t he rem ai ni ng $4 8,9 21 of M r. Larem or e’s cl ai m edali m on y de du ct io n (wh ic h c on si st edof h is pa ym en t o f th e jud gm en t) a ndde te rm in eda $1 2,4 48 de fic ie nc y

inMr. Lare m or e’s 20 09 Fed eral in co m e ta x.- 7 - OPINION I. Bu rd enof P ro of As a g en eral rul e, th e IRS ’s det erm in at io n i s p res um edco rrec t, an d ta xp ay ers ge ne ral ly bear t he bu rd ento pro ve th ei r en ti tl em en t t o a ny deduc ti on s th ey cla im . Rul e 1 42 (a); W el chv. Hel ve rin g, 2 90 U.S. 11 1, 1 15 (19 33 ). The
subm is si on of acas e und er Ru le 12 2 d oe s n otalt er tha t b ur de n. Se e Bo rch ers v. Co m m is si on er, 9 5 T.C. 8 2, 9 1 (1 99 0) , aff’d, 9 43 F.2d22 (8th C ir. 1 99 1)
. Tax pay ers m

us t s at is fy

th e sp eci fic requi rem en ts forany de du ct io n c la im ed . See INDOPCO, In c. v. Co m

m is si on er, 5 03 U.S. 79 , 84 (19 92 ). Mr. Larem or e se ek s t o de du ctas a li m on y

th e $ 48 ,92 1 h e p ai d t o M rs . Larem or e; inord er t o d o s o, h e
m us t p ro ve itwas i n fa cta pa ym en t o f al im on y . II. Defi ni ti on of Al im on y Sect io n 2 15 (a) a ll ows a de du ct io n t o t he pa y in g s po us e fo r th e al im on y or
se pa rat e m ai nt en an ce p aym en ts m ad e dur in g the pa y in g s po us e’s ta x year th atare in cl ud ib le inth e rec ip ie ntsp ou se ’s gro ss in co m e und er s ect io n 7 1( a). The ch arac te riz at io n o f pa ym en ts ina de cree as a li m on y or p ro pe rty set tl em en t i s n ot
co nt ro ll in g. See Bak er v . Comm is si on er, T.C. Mem o. 2 00 0- 16 4. Whethe r a pa ym en t co ns ti tu te s al im on y withi n t he m ean in g o f se ct io ns 71 (a) and21 5( a) i s de te rm in edby referen ce t o s ect io n 7 1( b) (1 ), whi chpro vi de s:- 8 - SEC. 7 1( b)
. Ali m on y

or S ep arat e Ma in te na nc e Paym en ts Defi ne d.-- Fo r pu rp os es of t hi s s ect io n- -

(1 ) Inge ne ral .--Th e te rm “ al im on y or s ep arat e m ai nt en an ce p aym en t” m ean s an y pa ym en t i n c as h i f-- (A) su chpa ym en t i s re cei ve d b y (oronbe ha lf of ) a s po us e und er a d iv or ce o r se pa rat io n i ns tru m en t, (B) th e d iv or ce o r se parat io n i ns tru m en t d oe s no t d es ig na te su chpa ym en t as a paym en t wh ic h i s n ot in cl ud ib le ingro ss in co m e und er thi s s ect io n a ndno t al lo wab le as ade du ct io n u nd er s ect io n 2 15 , (C) in th e cas e o f anin di vi du al leg al ly sep arat ed fro m hi s s po us e und er a d ecre e o f di vo rce o r of sep arat e m ai nt en an ce, the pa y ee s po us e an d t he pa y orsp ou se are no t m em be rs of t he same ho us eh ol d a t the ti m e su ch pa ym en t i s m ad e, an d (D) th ere i s n o l iabi li ty to m ak e an y su ch pa ym en t fo r any

pe rio d a fte r th e d eath o f th e p ay ee sp ou se an d t he re i s n o l iabi li ty to m ak e an y pa ym en t (i n cas h o r pr op erty ) as a subs ti tu te forsu chpa ym en ts aft er th e d eath o f th e p ay ee s po us e. In19 84 Co ng res s en act edsec ti on 71 init s cu rren t fo rm sp eci fic al ly to “ el im in at e th e subjec ti ve in qu iri es in to in te ntan d t he na tu re o f pa ym en ts th atha d p la gu edth e
co urts infav orof asi m

pl er, m or e o bjec ti ve tes t.” Ho ov er v . Comm is si on er, 1 02 F.3 d 8 42 , 84 4- 84 5 (6 th Cir . 19 96 ), aff’g T.C. Me m o. 1 99 5- 18 3. If a ll fou r of th es e
co nd it io ns are m et , th ena paym en t i s d educ ti bl e al im on y ; i f an y on e o r m or e o f- 9 -

th em is no t m et , th enth e p aym en t i s n otde du ct ib le ali m on y . Jaff e v . Co m m is si on er, T.C. Mem o. 1 99 9- 19 6, s li p o p. at9. III. Liab il it y

to m ak e p aym en t af

te r de ath, u nd er s ect io n 7 1( b) (1 )(D) The pa rti es do no t d is pu te whet he r Mr. Lare m or e’s 20 09 pa ym en t s at is fie s
se ct io n 7 1( b) (1 )(C) , bu t the Co m m is si on er co nt en ds th athe fai ls to m eetth e o th er th ree r equi rem en ts of t he st atut e in subp arag rap hs (A), (B), an d (D) . W e n eedno t ad dr es s al l thr ee o f th es e, be cau se we ho ldth atMr. Lare m or e d idrem ai n l iabl e to
m ak e th e p aym en t i n t he ev en t o f hi s ex -wif e’s de ath. The 2 00 9 p aym en t

3 th eref or e d idno t m eetth e requi rem en t o f se ct io n 7 1( b) (1 )(D) an d d idno t qua li fy
as de du ct ib le ali m on y .

The pa rti es do no t ra is e se ct io n 4 08 (d )(6 ), whi chpro vi de s tha t a t ran sf er o f 3 anin di vi du al ’s IRA to a fo rm er s po us e, pu rs uantto a di vo rce o r se pa rat io n ag reem en t, i s n ota ta xabl e tr an sf er. Fo r se ct io n 4 08 (d )(6 ) to ap pl y , “ (1 ) [t ]here m us t b e a tran sf

er o f th e IRA p art ic ip an t’s ‘in te res t’ inth e IRA t o h is sp ou se or fo rm er s po us e, an d (2 ) su chtra ns fer m us t h av e b eenm ad e und er a s ect io n 7 1( b) (2 ) di vo rce o r se pa rat io n i ns tru m en t.” Bu nn ey v. Co m m is si on er, 1 14 T.C. 25 9, 26 4- 26 5 (2 00 0) . Becau se th e 2 00 9 p aym en t b y Mr. Lare m or e was incas h fr om a no n- IRA acc ou nt(in st eadof b ei ng inth e fo rm of atra ns fer o f ha lf h is in te res t i n th e IRA v iaa QDRO), se ct io n 4 08 (d )(6 ) do es no t ap pl y . Howev er, Mr . andMrs
. Larem or e’s cl ear s ha redin te nt , at the ti m e o f th e st ip ul at io n o f se tt le m en t, was th at th e tr an sf er b e fro m

Mr. Lare m or e’s IRA. Thi s fa ctin flu en ces ou r co ns tru ct io n o f th e st ip ul at io n o f se tt le m en t an d s up po rts th e co nc lu si on th atth e ag reem en t pr ov id es fora tr an sf

er t o M rs . Larem or e th atwou ldbe no n- ta xabl e to he r an d t ha t wou ldtak e p la ce ev enif s he di edaft er the di vo rce a ndbe fo re the tra ns fer.- 10 -

Inde ci di ng whethe r paym en ts qu al ify as al im on y un de r se ct io n 7 1( b) (1 )(D),
we ex am in e th e te rm s o f th e d iv or ce o r se pa rat io n i ns tru m en t t o a sc ert ai n wh ethe r itco nt ai ns a co nd it io n t ha t t erm in at es th e p ay in g s po us e’s li ab il it y up onth e d eath of th e rec ip ie ntsp ou se , and , if i t d oe s n ot , whet he r St at e la w app li es su cha
co nd it io n i n c as es wher e th e in st ru m en t i s s il en t. See Hoo ve r v. C omm is si on er, 10 2 F .3dat 8 47 . Accor di ng ly, se ct io n 7 1( b) (1 )(D) i s s at is fie d “ if t he li ab il it y
ceas es up on th e d eath o f th e p ay ee s po us e b y op erat io n o f la w.” Pro ct orv. Co m m is si on er, 1 29 T.C. 92 , 96 (20 07 ) (ci ti ng Not ic e 8 7- 9, 1 98 7- 1 C .B. 42 1)
. Res po nd en t ar gu es th atMr. Laremore’s o bl ig at io n t o p ay wou ldno t te rm in at e atde ath, b ecau se “ [t]he re i s n o s ta tu te or c as el aw in eit he r New York o r Pen ns y lv an iawhi chwou ldren de r a jud gm en t fo r m on et ary da m ag es vo idif the jud gm en t cr ed it or

di es . In the ev en t o f th e d eath o f th e jud gm en t h ol de r, th e jud gm en t i nu res to th e b en efi t o f th e jud gm en t h ol de r’s he irs .” (Em ph as is ad de d.) Mr. Lare m or e co un te rs with t he arg um en t (f orwhi chhe cit es no au th or it y ) th athi s li ab il it y to pa y Mrs . Larem or e, orhe r es ta te (in th e ev en t o f he r de ath) , wou ld de pe ndon whet he r sh e h adpre vi ou sl y gi ve n t he ex ecu to r of

he r es ta te pe rm is si on to tra ns fer the ob li ga ti on at h er d eath. Bu t b ot h t he se co nt en ti on s, ad dr es si ng whe th er the jud gm en t ag ai ns t M r. Larem or e wou ldha ve su rv iv edMrs . Larem or e’s- 11 -

de ath, s tra y

fro m th e rea l i ss ue : wh ethe r Mr. Lare m or e’s ob li ga ti on un de r th e st ip ul at io n o f se tt le m en t wo ul d h av e su rv iv edhe r de ath. To d et erm in e whe th er an ob li ga ti on term in at es at t he pa y or ’s dea th , th e Co urt turns fir stto th e p la in lan gu ag e o f th e st ip ul at io n o f se tt le m en t. InW eb b v
. Co m m is si on er, T.C. Mem o. 1 99 0- 54 0, 1 99 0 Tax Ct. M em o LEXIS 5 94 , th e Co urt
was ask edto de ci de whet he r anob li ga ti on co nt ai ni ng th e p hr as e “ th e Hus ba nd sh al l p ay ” cre at edanob li ga ti on whi chsu rv iv edth e d eath o f th e rec ip ie ntsp ou se . Hig hl ig ht in g t he factth at“ th e st atut e sp eak s i n t erm s o f ‘liab il it y ’”, w e h el d t ha t th e ab ov e-quo te d p hr as e “ [u ]nqu es ti on ab ly * * * crea te d ali ab il it y whi chwou ld ha ve be enen fo rceabl e b y * * * [t he form er s po us e’s] esta te ha d s he di edaft er the
ex ecu ti on of t he ag reem en t b utbe fo re the paym en ts were ac tu al ly m ad e.” Id ., 19 90 Tax C ou rt M em o LEXIS 5 94 , at * 10 -* 11
. Si m il arl y , th e st ip ul at io n o f se tt le m en t b etweenMr. an d M rs . Larem or e pr ov id ed : The va lu e o f Mr. Lare m or e’s IRA’s, ov er Mr s. Lare m or e’s, is $7 7,7 30 .48 . The ag reem en t i s tha t s he wil l g etha lf o f th atsu m for $3 8, 8 65 .24 . She wil l g etth at$3 8,8 65 .24 vi a a QDRO b ei ng pl aced on Mr. Lare m or e’s tr ad it io na l IRA so th atth atam ou ntwil l b e tra ns ferr edto he r an d t he en d re su ltis th atth e p art ie s wi ll ha ve equa ll y sh aredth es e ret ire m en t ac co un ts . [Em ph as is ad de d.]- 12 -

The lan gu ag e cre at in g t he ob li ga ti on --“ sh e wil l g et ” an d “ th atam ou ntwil l b e tra ns ferr edto he r”-- im

po se s a l iabi li ty on M r. Larem or e th atis no t m ad e
co nd it io na l o n d eath o r rem arri ag e an d t ha t i s n otqu al ifi edinan y way by ano th er pr ov is io n. As inW eb b, the ab ov e-quo te d l an gu ag e--wi th ou t qua li fic at io n o r la ng ua ge in di cat in g t erm in at io n a t d eath- -s ta nd s i n s harp co nt ras t t o alat er s ect io n of th e st ip ul at io n o f se tt le m en t p ro vi di ng form ai nt en an ce p aym en ts , wher e th e ag reem en t ex pr es sl y

st at es th atth e m ai nt en an ce p aym en ts wou ldterm in at e in th e
ev en t o f Mrs . Larem or e’s de ath o r rem arri ag e. See Webb v. Co m m is si on er, 1 99 0 4 Tax Co urt M em o LEXIS 5 94 , at * 11 (“ Para gr ap h 4 of t he ag reem en t s ta nd s i n sh arp co ntras t; itsp eci fic al ly pro vi de s fo r te rm in at io n o f th e $ 40 ,00 0 ann ua l pa ym en ts inth e ev en t o f th e ‘Death of t he W ife ’”). W he n t he st ip ul at io n o f
se tt le m en t was reco rd ed , Mr. Larem or e ag reedto be bo un d b y th e ag reem en t; he ackno wled ge d t ha t h e und ers to odth e b in di ng im pl ic at io n o f th e st ip ul at io n, tha t i t
se tt le d t he m at te r an d t ha t i t was inli euof ade ci si on is su edby the co urt. The refo re, p ur su an t t o t he st ip ul at io n o f se tt le m en t an d t he di vo rce d ecre e, Mr. Lare m or e’s ob li ga ti onto m ak e th e p aym en t atis su e su rv iv es th e d eath o f

Mr. Lare m or e’s di vo rce c ou ns el st at edon th e rec or d: “ I jus t wan te d t o 4 cl ari fy , th atif M rs . Larem or e d ie s, Go d fo rb id , or re m arri es , m ai nt en an ce en ds .”- 13 -

Mrs . Larem or e, an d t ha t p aym en t was no t al im on y un de r se ct io n 7 1( b) (1 ) or de du ct ib le un de r se ct io n 2 15 (a). IV. Mr. Lare m or e’s ad di ti on al arg um en t Pu rs uantto th e te rm s o f th e st ip ul at io n o f se tt le m en t, Mr . Larem or e’s ob li ga ti on sh ou ldha ve be ensat is fie d, u nd er a QDRO, b y a ta x- free tra ns fer fr om hi s IRA, leav in g s ti ll av ai labl e to hi m hi s n on -IRA fu nd s, wh ic h h e was free to withd raw wit ho utth e ta x l iabi li ty tha t wo ul d a cco m pa ny IRA with dr awal s. An d
un de r th os e te rm s, M rs . Larem or e wou ldha ve owedtax at s uc h t im e as sh e withd rew the IRA-d eri ve d fu nd s tha t h adbe entra ns ferr edto he r. Ins te ad , bec au se Mr. Lare m or e h adto pa y th e jud gm en t o utof n on -IRA fu nd s, M rs . Larem or e
rece iv edno n- IRA m on ey onwhi chsh e d idno t h av e to pa y tax ; an d Mr. Lare m or e’s no n- IRA fund s h av e b eende pl et ed . (Upo n wi th dr awin g equi va le ntfun ds fro m

hi s IRA, he wi ll ha ve to pa y tax th atsh ou ldha ve be en bo rn e b y Mrs . Larem or e.) Mr. Lare m or e th us un de rs ta nd ab ly com pl ai ns th atth e ta x e ffec ts of t he di vo rce s et tl em en t h av e b eendi st orte d t o h is di sa dv an ta ge ; an d h e se em s t o
co nt en d, i n e ffec t, tha t thi s d is to rti onsh ou ldbe curedby allo win g h im to de du ct- 14 -

th e p aym en t as ali m on y . Howev er s ym pa th et ic Mr. Lare m or e’s ci rcu m st an ce m ay 5 be , andho wev er ap pe al in g h is pro po se d c ur e m ig htsee m , itis no t warran te d u nd er
se ct io n 7 1( b) (1 ). If th e am ou nthe was o bl ig at edto pa y was n otali m on y

(an d i t
was no t), the n i t d oe s n otbe co m e d educ ti bl e si m pl y be cau se th e ta x i nc id en ts of th e tr an sf er were wors e fo r hi m

th anth ey sh ou ldhave be enun de r th e ag reem en t th athe an d h is ex -wif

e h adreac he d. Any

in equi ti es inth e d iv or ce s ettl em en t
wou ldha ve to be ad dr es se d b y th e d iv or ce co urt, an d the Tax C ou rt c an no t ad dr es s the m

by m ak in g e qu it ab le ad

jus tm en ts to Mr. Lare m or e’s ta x l iabi li ty not cal le d fo r in th e In te rn al Rev enue Co de
. To re fle ctth e fo reg oi ng , Deci si on wil l b e en te redfor
res po nd en t.

Mr. Lare m or e al so see m s t o s ug ge stth atMrs . Larem or e sh ou ldbe he ld 5 li ab le forin co m e ta x o n t he $4 8,9 21 th atwas p ai d t o h er p ur su an t t o the jud gm en t, an d i n t hi s co nn ect io n h e ci te s s ect io n 1 04 1, wh ic h p ro vi de s ru le s fo r ga in , lo ss , an d b as is when pro pe rty is tran sf erre d i nc id en t t o adi vo rce. Ho wev er, Mr s. Larem or e’s li ab il ity

is no t b efo re u s, an d we t he refo re d o n otatt em ptto an al y ze he r si de of t he trans fers at i ss ue .