Court Opinion

ID: 9930838
Source: CourtListenerOpinion
Date Created: 2024-02-07 20:03:57.109233+00
Date Added: 2024-06-11T11:44:29.782798
License: Public Domain

United States Tax Court

                               T.C. Memo. 2024-18

                    JOSEPH ANTHONY MARTINO, JR.,
                              Petitioner

                                           v.

               COMMISSIONER OF INTERNAL REVENUE,
                           Respondent

                                     —————

Docket No. 17336-21.                                       Filed February 7, 2024.

                                     —————

Mark C. Harper, for petitioner.

Ephraim A. Lucas and John W. Sheffield III, for respondent.

                          MEMORANDUM OPINION

       LAUBER, Judge: With respect to petitioner’s Federal income tax
for 2017 and 2018, the Internal Revenue Service (IRS or respondent)
determined deficiencies of $11,856 and $8,194, respectively, plus an
accuracy-related penalty for 2017 (since conceded). Currently before the
Court are the parties’ Cross-Motions for Summary Judgment. The sole
issue for decision is whether petitioner may deduct, as “alimony,” certain
payments he made to his ex-wife during 2017 and 2018.

       Resolution of this question is governed by the law as it existed
before enactment of the Tax Cuts and Jobs Act of 2017 (Act), Pub. L. No.
115-97, § 11051, 131 Stat. 2054, 2089–90. That law generally eliminated
the alimony deduction in the case of divorce or separation agreements
executed after December 31, 2018. See id. During the tax years at issue
section 215(a) 1 allowed a deduction for “alimony or separate

       1 Unless otherwise indicated, statutory references are to the Internal Revenue

Code, Title 26 U.S.C. (Code), in effect at all relevant times, and Rule references are to

                                 Served 02/07/24
                                      2

[*2] maintenance payments.” Respondent contends that the deductions
petitioner claimed were properly disallowed because his payments to his
ex-wife did not qualify as “alimony” as defined in section 71(b). Agreeing
with respondent on this point, we will grant his Cross-Motion and deny
petitioner’s.

                                Background

      The following facts are derived from the parties’ pleadings and
Motion papers, including the attached Declarations and Exhibits. See
Rule 121(c). Petitioner resided in Georgia when he timely petitioned
this Court.

       Petitioner married Cindy Roberts, and the couple had two chil-
dren. On November 21, 2005, in anticipation of divorce, petitioner and
Ms. Roberts entered into a marital settlement agreement (Settlement
Agreement) addressing numerous issues, including the division of mar-
ital assets, child support, and “taxable periodic alimony” to be paid by
petitioner to Ms. Roberts. The Settlement Agreement was approved by
the Superior Court of Forsyth County, Georgia (Superior Court).

       Paragraph 1 of the Settlement Agreement, captioned “Equitable
Division,” specified an allocation of assets that was “meant to be an eq-
uitable division of the marital property, except as specifically provided
herein, and said division is non-taxable to either party.” Paragraph 6
provided that petitioner would have exclusive possession, ownership,
and use of the marital residence and 182 acres of adjacent land (Prop-
erty) in exchange for a $2.2 million payment to Ms. Roberts. That pay-
ment was due on the earlier of September 1, 2006, or the date the Prop-
erty was sold. The Settlement Agreement separately provided, in para-
graphs 16 and 17, that petitioner was obligated to make monthly pay-
ments to Ms. Roberts of $3,000 “as taxable periodic alimony” and to
make monthly payments of $2,000 per child as child support. Upon the
termination of child support for one of the two children, monthly pay-
ments of $3,000 were to be paid to support the other child.

      On March 10, 2006, the Superior Court issued a Final Judgment
and Decree of Divorce (Divorce Decree) dissolving the marriage. The
fourth paragraph of the Divorce Decree incorporated the Settlement
Agreement “as if quoted verbatim.” On December 19, 2006, the parties
signed a Consent Order (Order) that modified petitioner’s obligations

the Tax Court Rules of Practice and Procedure. We round monetary amounts to the
nearest dollar.
                                     3

[*3] under the Divorce Decree. In exchange for other concessions, peti-
tioner was now to pay a total of $3.5 million to his ex-wife for her interest
in the Property. That sum was to be paid as follows: (1) $250,000 by
December 21, 2006, (2) $250,000 by February 21, 2007, and (3) $3 mil-
lion by the earlier of December 31, 2007, or the date the Property was
sold. The Order stated that “as part of the equitable division of marital
property, all of the above-referenced payments [i.e., the $3.5 million]
shall be tax-free” to Ms. Roberts.

      Petitioner made the initial $250,000 payment but failed to make
any further payments. In March 2007 Ms. Roberts accordingly filed a
Motion for Contempt, seeking payment of the $250,000 installment that
was due the previous month. On April 26, 2007, the Superior Court is-
sued an order directing petitioner to pay that sum, plus interest.

        In an effort to ensure that the upcoming $3 million installment
was also paid, the Superior Court ordered petitioner to execute a “Deed
to Secure Debt.” This Deed conveyed to Ms. Roberts an interest in the
Property—she had previously relinquished her interests by quitclaim
deed—for the express purpose of allowing her to foreclose on the Prop-
erty if she did not receive the $3 million payment. The Deed was to be
executed on April 23, 2007. The Superior Court noted that this Deed
evidenced petitioner’s obligation to pay Ms. Roberts “the sum of
$3,000,000 on the earlier of December 31, 2007, or upon the sale of the
[P]roperty to another, pursuant to this Court’s December 19, 2006, Or-
der.”

       In late 2007 third-party lenders foreclosed on the Property after
petitioner defaulted on his obligations to them. Petitioner made no pay-
ment to Ms. Roberts by year-end 2007, and she then filed a second Mo-
tion for Contempt. In February 2008 the Superior Court issued an order
finding petitioner in “willful contempt” because he had “failed to pay any
monies toward the satisfaction of a $3,000,000.00 obligation created by
the parties’ divorce agreement and due on December 31, 2007.” The or-
der directed petitioner to pay $3 million to Ms. Roberts within 90 days.
Unable or unwilling to do so, petitioner filed for bankruptcy. He was
granted a bankruptcy discharge in April 2009, but his $3 million obliga-
tion to Ms. Roberts was ruled nondischargeable.

      The Superior Court conducted hearings in May and June 2010 to
consider petitioner’s ongoing failure to make payments toward his
$3 million property settlement obligation. The Superior Court ascer-
tained that petitioner was receiving income of $25,000 per month
                                    4

[*4] (mostly tax-free) from two disability insurance policies. The Supe-
rior Court determined that “it is necessary at this time to impose a rem-
edy that addresses Ms. Roberts’ need to be paid funds that are owed
pursuant to the divorce decree.”

       On the basis of findings made during these hearings, the Superior
Court in June 2010 imposed a new payment schedule, pursuant to which
petitioner would discharge his property settlement obligation in install-
ments. The Superior Court ordered petitioner to pay Ms. Roberts:
(1) $50,000 immediately; (2) “$10,000 per month toward the $3,000,000
obligation for a period of 12 months”; and (3) “$25,000 per month [there-
after] until the full obligation, including interest, is paid in full.” The
Superior Court “retain[ed] jurisdiction to enter any additional or modi-
fied orders,” and it directed petitioner to maintain an irrevocable life
insurance policy, with Ms. Roberts as beneficiary, “in an amount equiv-
alent to his outstanding obligation.”

        On September 3, 2010, the Superior Court issued two Income De-
duction Orders (IDOs), directing that amounts due on petitioner’s disa-
bility insurance policies be withheld to satisfy his obligations under the
new payment schedule. Paragraph (a), captioned “Unpaid Arrearage,”
stated that the amounts thus withheld were “for the previously owed
arrearage due to [Ms. Roberts] in the amount of THREE MILLION
DOLLARS ($3,000,000) plus interest at the rate of SEVEN PERCENT
(7%) per annum commencing on January 1, 2008, pursuant to this
Court’s February 29, 2008, Order Granting Plaintiff’s Motion for Con-
tempt.”

      During the ensuing six years petitioner made regular monthly
payments, via withholding from his insurance policies, toward his out-
standing $3 million obligation to Ms. Roberts. But he became delin-
quent with respect to certain other obligations, including his obligation
to pay alimony. In October 2016 the Superior Court issued a Consent
Order specifying how his monthly payments were to be applied to these
outstanding arrearages.

       The Consent Order directed that, beginning October 1, 2016, the
$25,000 monthly payments were first to be applied to the balances of
five specified obligations, including past-due alimony of $27,000. When
those obligations (including alimony) were fully paid, all succeeding pay-
ments were to be applied to the “outstanding balance due on the prop-
erty division payment that was in the original principal amount of
                                    5

[*5] $3 million, plus interest.” The Consent Order confirmed that both
IDOs were to remain in force.

      During 2016 petitioner made the required monthly payments of
$25,000 to Ms. Roberts. The first nine payments (totaling $225,000)
were applied to his property settlement obligation. Pursuant to the Oc-
tober 2016 Consent Order, the last three payments (totaling $75,000)
were applied to the other arrearages mentioned above. By year-end
2016 petitioner had fully discharged the past-due amounts he owed Ms.
Roberts for alimony, child support, and uninsured medical expenses.

       During 2017 petitioner again made the required monthly pay-
ments of $25,000 (totaling $300,000). Pursuant to the October 2016
Consent Order, these payments were first applied to satisfy his past-due
obligations to defray Ms. Roberts’ attorney’s fees ($22,670) and to pay
premiums on the life insurance policy required by the Superior Court’s
June 2010 order ($102,353). Those payments totaled $125,023. The bal-
ance of the $300,000, or $174,977, was applied toward petitioner’s out-
standing $3 million property settlement obligation.

       During 2018 petitioner again made the required monthly pay-
ments of $25,000. As of December 31, 2017, he had fully discharged all
of the arrearages addressed in the 2016 Consent Order. Thus, the entire
$300,000 for 2018 was applied toward petitioner’s outstanding $3 mil-
lion property settlement obligation.

       Petitioner did not timely file a Federal income tax return for 2017
or 2018. In November 2018 he filed a delinquent return for 2017 on
which he claimed no deduction for alimony and a $43,343 deduction for
a net operating loss (NOL). In May 2019 he filed an amended return for
2017, disclaiming the NOL deduction and claiming an alimony deduc-
tion for the $300,000 paid to Ms. Roberts. The IRS did not accept his
amended return for filing. In November 2019 he filed a delinquent re-
turn for 2018, on which he again claimed a $300,000 alimony deduction.

       The IRS selected petitioner’s 2017 and 2018 returns for examina-
tion. On February 2, 2021, the IRS issued him a timely notice of defi-
ciency, disallowing the NOL deduction claimed on his original 2017 re-
turn and determining that the $300,000 paid to Ms. Roberts in 2018 was
not deductible because it was not “alimony.”

       Petitioner timely petitioned this Court for redetermination of the
deficiencies. In September 2022 he filed a Motion for Summary Judg-
ment urging that he is entitled in each year to a $300,000 alimony
                                    6

[*6] deduction. Respondent timely objected to the Motion and filed a
Cross-Motion for Summary Judgment. In his reply to the Cross-Motion,
petitioner does not contest the disallowance of the $43,343 NOL deduc-
tion claimed on his original 2017 return.

                               Discussion

I.     Summary Judgment Standard

       The purpose of summary judgment is to expedite litigation and
avoid costly, time-consuming, and unnecessary trials. Fla. Peach Corp.
v. Commissioner, 90 T.C. 678, 681 (1988). The Court may grant sum-
mary judgment when there is no genuine dispute as to any material fact
and a decision may be rendered as a matter of law. Rule 121(a)(2);
Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff’d, 17
F.3d 965 (7th Cir. 1994). The parties agree on all questions of basic fact
and have expressed that consensus by filing Cross-Motions for Summary
Judgment. We conclude that the question presented is appropriate for
summary adjudication.

II.    Burden of Proof

        The IRS’s determinations in a notice of deficiency are generally
presumed correct, and the taxpayer bears the burden of proving them in
error. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). De-
ductions are a matter of legislative grace, and the taxpayer bears the
burden of proving that he is entitled to the claimed deductions.
INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); Hradesky v.
Commissioner, 65 T.C. 87, 90 (1975), aff’d per curiam, 540 F.2d 821 (5th
Cir. 1976). The burden of proof may shift to the Commissioner under
certain circumstances if the taxpayer comes forward with credible evi-
dence regarding a factual issue relevant to ascertaining his liability. See
§ 7491(a)(1). Petitioner does not contend, nor does the evidence estab-
lish, that the burden shifts to respondent as to any issue of fact.

III.   Alimony Deduction

       A.    Statutory Background

       Payments incident to divorce commonly fall into one of two cate-
gories: alimony or property settlements. In general, alimony is a divi-
sion of income, and a property settlement is a division of marital prop-
erty. See Rogers v. Commissioner, T.C. Memo. 2005-50, 89 T.C.M. (CCH)
850, 851. A property settlement incident to a divorce is not a taxable
                                          7

[*7] event and does not give rise to gain or loss. See § 1041; Estate of
Goldman v. Commissioner, 112 T.C. 317, 323 (1999), aff’d sub nom.
Schutter v. Commissioner, 242 F.3d 390 (10th Cir. 2000) (unpublished
table decision); Peery v. Commissioner, T.C. Memo. 2014-151, 108
T.C.M. (CCH) 91, 93.

       During the tax years at issue, alimony was treated differently: It
was generally deductible by the payor spouse and taxable to the payee.
Section 215 allowed a deduction for “any alimony or separate mainte-
nance payment (as defined in section 71(b)) which is includible in the
income of the recipient under section 71.” See § 215(a) and (b). And
section 71(a) provided that “[g]ross income includes amounts received as
alimony or separate maintenance payments,” as that term was defined
in section 71(b). 2

       Section 71(b) defined an “alimony or separate maintenance pay-
ment” as “any payment in cash” that satisfied four specified conditions.
First, the payment must be received by a spouse “under a divorce or
separation instrument.” § 71(b)(1)(A). Second, the divorce or separation
instrument must not designate the payment “as a payment which is not
includible in gross income under this section and not allowable as a de-
duction under section 215.” § 71(b)(1)(B). Third, the payor and payee
spouses must not be “members of the same household at the time such
payment is made.” § 71(b)(1)(C). Fourth, there must be no liability to
make any such payment (or substitute therefor) “after the death of the
payee spouse.” § 71(b)(1)(D). When enacting this definition in 1984,
Congress intended “to establish an objective standard to distinguish be-
tween a payment received in the division of property . . . and a payment
received as spousal support.” Estate of Goldman, 112 T.C. at 322 (citing
legislative history).

       Petitioner contends that his $300,000 payments to Ms. Roberts in
2017 and 2018 constituted deductible alimony. Respondent contends
that the payments were components of a marital property settlement (or
otherwise failed to qualify as alimony). While not disputing satisfaction
of the first and third conditions set forth above, respondent contends

         2 Sections 71 and 215 were both stricken from the Code by Act § 11051(a),

(b)(1)(B), 131 Stat. at 2089–90. These amendments were generally effective for “any
divorce or separation instrument . . . executed after December 31, 2018.” Id.
§ 11051(c)(1), 131 Stat. at 2090. However, prior law continued to apply for agreements
executed on or before December 31, 2018, if the agreement was modified thereafter
and “if the modification expressly provides that the amendments made by this section
apply to such modification.” Id. § 11051(c)(2).
                                    8

[*8] that petitioner’s payments failed to meet the requirements of sec-
tion 71(b)(1)(B) and (D). Because the statutory requirements are in the
conjunctive, all must be met in order for a taxpayer to be allowed a de-
duction. Concluding as we do that petitioner’s payments do not meet
the condition specified in section 71(b)(1)(B), we need not consider re-
spondent’s alternative argument.

      B.     Analysis

       Congress defined the term “divorce or separation instrument”
broadly. The term includes “a decree of divorce or separate maintenance
or a written instrument incident to such a decree,” a “written separation
agreement,” or another form of “decree . . . requiring a spouse to make
payments for the support or maintenance of the other spouse.”
§ 71(b)(2). Section 71(b)(1)(B) provides that, in order for a payment to
be considered alimony, “the divorce or separation instrument [must] 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.”

       Section 71(b)(1)(B) is drafted somewhat unartfully, containing as
it does a double—indeed a triple—negative. Rephrased in simpler
terms, this provision requires us to determine whether the instrument
“contains a nonalimony designation.” Estate of Goldman, 112 T.C.
at 323. This inquiry is a practical, not a technical, one. The instrument
“need not mimic the statutory language,” e.g., by “specifically refer[ring]
to sections 71 and 215.” Ibid. Rather, “the divorce or separation instru-
ment contains a nonalimony designation if the substance of such a des-
ignation is reflected in the instrument.” Ibid.; see Faust v. Commis-
sioner, T.C. Memo. 2019-105, 118 T.C.M. (CCH) 177, 179–80 (noting that
a nonalimony designation must be “clearly reflected” in the substance of
the divorce instrument).

       Given the litigation history of the divorce proceedings here, no
single document specifies the precise payments to which Ms. Roberts
was entitled. Rather, the “divorce or separation instrument” consists of
multiple documents executed over a ten-year period, including the Set-
tlement Agreement, the Divorce Decree, and a series of Consent Orders
and Contempt Orders. The last of these documents was the Consent
Order issued in October 2016. From beginning to end, the consistent
import of this instrument is that petitioner’s payments toward what be-
came a $3 million obligation did not constitute alimony but were install-
ment payments in discharge of a property settlement.
                                          9

[*9] The 2005 Settlement Agreement, incorporated verbatim in the
March 2006 Divorce Decree, specified that petitioner would retain own-
ership of the marital residence in exchange for a $2.2 million payment
to Ms. Roberts. That paragraph of the Agreement plainly specified a
property settlement. In other paragraphs the Agreement separately
provided for “taxable periodic alimony” ($3,000 per month) and child
support ($2,000 per child per month). The original Divorce Decree thus
contained an explicit “nonalimony designation” for the $2.2 million obli-
gation.

        The December 2006 Order increased the $2.2 million obligation
to $3.5 million and provided that this sum was to be paid in three in-
stallments. The Superior Court ordered two payments of $250,000 (both
of which petitioner eventually made) and a final “balloon payment” of
$3 million due December 31, 2007, at the latest. The Order stated that
“all of the above-reference payments shall be tax-free to Ms. Roberts.”
This Order thus included an explicit “nonalimony designation” for all
payments made toward the $3.5 million obligation.

       During 2007–2010 the focus of the parties’ dispute was peti-
tioner’s ongoing failure (exacerbated by his bankruptcy) to make the fi-
nal $3 million payment toward the marital property settlement. In June
2010, after several Contempt Orders, the Superior Court imposed a new
payment schedule that required petitioner to discharge his $3 million
obligation in installments, viz, by paying Ms. Roberts $50,000 immedi-
ately, $10,000 per month for one year, and then “$25,000 per month un-
til the full obligation, including interest, is paid in full.” In September
2010 the Superior Court issued IDOs directing that these monthly pay-
ments were to be withheld from petitioner’s disability insurance policies.
The Superior Court’s orders explicitly stated that the amounts thus
withheld were “for the previously owed arrearage due to [Ms. Roberts]
in the amount of THREE MILLION DOLLARS ($3,000,000) plus inter-
est.” These orders of the Superior Court again contained an explicit
“nonalimony designation” for all payments made toward the $3 million
obligation. 3

         3 Petitioner appears to equate the IDOs with “Domestic Relations Support Or-

ders” under Georgia law and says that IDOs cannot be used to effect an “equitable
division of property.” He offers no plausible support for this: The “equitable division
of property” was effected by the Settlement Agreement and the Divorce Decree. The
IDOs did not divide any property. Rather, they were essentially orders of garnishment,
i.e., a mechanism for ensuring that petitioner made the property settlement payments
that the Superior Court had separately ordered him to make.
                                          10

[*10] For six years petitioner made the required monthly payments to-
ward his $3 million property settlement obligation, while becoming de-
linquent in certain of his other obligations to Ms. Roberts. This precip-
itated the October 2016 Consent Order, which was the final component
of the “divorce or separation instrument.” This Consent Order specified
how petitioner’s monthly payments would be allocated between the
$3 million obligation and his other arrearages.

       The Consent Order directed that, beginning October 1, 2016, the
$25,000 monthly payments were to be applied first to petitioner’s ar-
rearages on five other obligations, including past-due alimony of
$27,000. When those arrearages were fully discharged, all succeeding
payments were to be applied to the “outstanding balance due on the
property division payment that was in the original principal amount of
$3 million, plus interest.” Petitioner’s final three payments during 2016
(totaling $75,000) were applied to those other arrearages, and by
year-end 2016 he had fully discharged his past-due obligations for ali-
mony, child support, and Ms. Roberts’ uninsured medical expenses.

       This brings us to the $300,000 annual payments petitioner made
in 2017 and 2018, for which he is claiming alimony deductions. During
2017 his payments were first applied to his final two arrearages, i.e., his
obligations to defray Ms. Roberts’ attorney’s fees and to pay premiums
on the life insurance policy required by the Superior Court’s June 2010
order. Those amounts totaled $125,023. The balance of the $300,000,
or $174,977, was applied to the unpaid balance of his $3 million property
settlement obligation. By year-end 2017 he had fully discharged all of
his other arrearages, so the entire $300,000 for 2018 was applied toward
the unpaid balance of his $3 million property settlement obligation. In
short, none of the $600,000 he paid Ms. Roberts during 2017 and 2018
was paid as “alimony.” 4

        4 This Court has held that, in certain situations, the payment of health insur-

ance premiums for an ex-spouse incident to divorce may be in the nature of alimony.
See Leyh v. Commissioner, 157 T.C. 86, 94 (2021). Petitioner was responsible for Ms.
Roberts’ uninsured medical expenses, but he fully discharged his arrearage in that
respect during 2016. His 2017 payments discharged his $102,353 arrearage for life
insurance premiums. But the Superior Court ordered the life insurance policy to back-
stop his $3 million property settlement obligation; that policy had nothing to do with
his obligation to pay alimony. In any event, petitioner has not argued for a reduced
2017 alimony deduction of $102,353, and we deem that issue conceded. See Rule
34(b)(1)(G) (providing that an issue not raised in a taxpayer’s petition is generally
deemed conceded); Mendes v. Commissioner, 121 T.C. 308, 312–13 (2003) (holding that
an argument not pursued on brief may be considered “abandoned”).
                                   11

[*11] Petitioner urges that he is entitled to alimony deductions because
his 2017 and 2018 payments were “periodic” payments made directly to
his ex-wife. But the manner in which the payments were made is not
dispositive (or even relevant) under section 71(b)(1)(B). The Divorce De-
cree included a “nonalimony designation” that ordered petitioner to pay
the marital property settlement in a lump sum. But he defaulted on
that obligation, filed for bankruptcy, and became unable to pay his $3
million obligation in a lump sum. That is why the Superior Court in
June 2010 imposed a new payment schedule, ordering that petitioner
discharge the $3 million property settlement obligation from June 2011
onwards by paying installments of “$25,000 per month until the full ob-
ligation, including interest, is paid in full.” The switch from a lump-sum
payment to installment payments did not convert the property settle-
ment to alimony. It was simply a consequence of petitioner’s apparent
inability to discharge his property settlement obligation in any other
way.

       Finally, petitioner urges that he is entitled to alimony deductions
because the October 2016 Consent Order—the final order issued by the
Superior Court—does not explicitly state that the payments “were not
includible in the gross income” of Ms. Roberts. See § 71(b)(1)(B). But as
we have previously held, the divorce or separation instrument “need not
mimic the statutory language” by “specifically refer[ring] to sections 71
and 215.” Estate of Goldman, 112 T.C. at 323. Rather, we must ascer-
tain whether “the substance of [a nonalimony] designation is reflected
in the instrument.” Ibid.; see Faust, 118 T.C.M. (CCH) at 179–80.

       We agree that the October 2016 Consent Order, as the final order
in the series, should be given special weight in ascertaining the meaning
of the integrated “divorce or separation instrument.” See, e.g., Lehrer v.
Commissioner, T.C. Memo. 1980-256, 40 T.C.M. (CCH) 680, 685. But
the critical question is whether this final order “modif[ied], chang[ed],
or replac[ed] the provisions of the initial agreement with respect to ali-
mony.” Ibid. All prior orders of the Superior Court contained an explicit
“nonalimony designation.” This final order did not change the state of
play in any way helpful to petitioner.

       The October 2016 Consent Order did modify the Superior Court’s
prior directives, which had specified that the $25,000 monthly payments
be allocated exclusively to the unpaid balance of the $3 million property
settlement. This final order directed that, beginning October 1, 2016,
the monthly payments should instead be applied first to petitioner’s ar-
rearages in five other obligations, including alimony and child support.
                                   12

[*12] But petitioner discharged the entirety of his alimony and child-
support arrearages in 2016. His payments during 2017 and 2018 were
applied first to the arrearages on his other two past-due obligations (at-
torney’s fees and insurance premiums totaling $125,023). The remain-
der, or $474,977, was applied to the unpaid balance of his property set-
tlement obligation.

       In sum, we cannot read the October 2016 Consent Order in isola-
tion. Rather, we must read it in conjunction with the Divorce Decree
and the Superior Court’s prior orders, which collectively constitute the
“divorce or separation instrument.” See § 71(b)(2). The Superior Court’s
prior orders contained an explicit “nonalimony designation” for the
$25,000 monthly payments, directing that they be allocated to the un-
paid balance of petitioner’s $3 million property settlement obligation.
The October 2016 Consent Order modified these prior orders in only one
relevant respect—by directing that a portion of the 2016 payments be
allocated to petitioner’s arrearages in alimony and child support. This
may have entitled him to a modest alimony deduction in 2016. But be-
cause the entirety of his payments during 2017 and 2018 were allocated
to nonalimony obligations—chiefly the property settlement—he is enti-
tled to no alimony deduction for either year.

      We have considered all of the parties’ contentions and arguments
that are not discussed herein, and we find them unnecessary to reach,
without merit, or irrelevant.

      To reflect the foregoing,

      An appropriate order and decision will be entered.