Sheldon A. Bernstein and Lorrie H. Bernstein v. Commissioner of Internal Revenue

The appellants challenge a Tax Court decision in favor of the Commissioner which denied deductions by appellants of certain alimony payments. This appeal raises questions about the characterization of payments made pursuant to an alimony award for the purposes of applying sections 71 and 215 of the Internal Revenue Code, I.R.C. §§ 71, 215, and about the effect of recent developments in Nebraska law on the pertinent divorce decree. Jurisdiction rests on 26 U.S.C. § 7482 (a) (1976). We affirm.

I.

FACTUAL BACKGROUND

Bernstein claimed deductions for amounts paid in 1972 and 1973 to his former wife in accordance with a divorce decree entered by a Nebraska court on April 24, 1972. He began making monthly payments to her immediately after the decree was entered. Three kinds of payments were ordered. First, he was to pay $1,000 each month for five years. The decree described this aggregate amount of $60,000 as “alimony in gross . . . payable irrespective of the death of either the Plaintiff or the Defendant, or the remarriage of the Defendant during said period of sixty months.” Next, at the expiration of five years, Bernstein was to pay $700 each month until his former wife’s death,…