
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC71]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
               Subchapter B--Computation of Taxable Income
 
          PART II--ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME
 
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.

                (2) Divorce or separation instrument

        The term ``divorce or separation instrument'' means--
            (A) a decree of divorce or separate maintenance or a written 
        instrument incident to such a decree,
            (B) a written separation agreement, or
            (C) a decree (not described in subparagraph (A)) requiring a 
        spouse to make payments for the support or maintenance of the 
        other spouse.

(c) Payments to support children

                           (1) In general

        Subsection (a) shall not apply to that part of any payment which 
    the terms of the divorce or separation instrument fix (in terms of 
    an amount of money or a part of the payment) as a sum which is 
    payable for the support of children of the payor spouse.

    (2) Treatment of certain reductions related to contingencies 
                               involving child

        For purposes of paragraph (1), if any amount specified in the 
    instrument will be reduced--
            (A) on the happening of a contingency specified in the 
        instrument relating to a child (such as attaining a specified 
        age, marrying, dying, leaving school, or a similar contingency), 
        or
            (B) at a time which can clearly be associated with a 
        contingency of a kind specified in subparagraph (A),

    an amount equal to the amount of such reduction will be treated as 
    an amount fixed as payable for the support of children of the payor 
    spouse.

    (3) Special rule where payment is less than amount specified 
                                in instrument

        For purposes of this subsection, if any payment is less than the 
    amount specified in the instrument, then so much of such payment as 
    does not exceed the sum payable for support shall be considered a 
    payment for such support.

(d) Spouse

    For purposes of this section, the term ``spouse'' includes a former 
spouse.

(e) Exception for joint returns

    This section and section 215 shall not apply if the spouses make a 
joint return with each other.

(f) Recomputation where excess front-loading of alimony payments

                           (1) In general

        If there are excess alimony payments--
            (A) the payor spouse shall include the amount of such excess 
        payments in gross income for the payor spouse's taxable year 
        beginning in the 3rd post-separation year, and
            (B) the payee spouse shall be allowed a deduction in 
        computing adjusted gross income for the amount of such excess 
        payments for the payee's taxable year beginning in the 3rd post-
        separation year.

                     (2) Excess alimony payments

        For purposes of this subsection, the term ``excess alimony 
    payments'' mean the sum of--
            (A) the excess payments for the 1st post-separation year, 
        and
            (B) the excess payments for the 2nd post-separation year.

          (3) Excess payments for 1st post-separation year

        For purposes of this subsection, the amount of the excess 
    payments for the 1st post-separation year is the excess (if any) 
    of--
            (A) the amount of the alimony or separate maintenance 
        payments paid by the payor spouse during the 1st post-separation 
        year, over
            (B) the sum of--
                (i) the average of--
                    (I) the alimony or separate maintenance payments 
                paid by the payor spouse during the 2nd post-separation 
                year, reduced by the excess payments for the 2nd post-
                separation year, and
                    (II) the alimony or separate maintenance payments 
                paid by the payor spouse during the 3rd post-separation 
                year, plus

                (ii) $15,000.

          (4) Excess payments for 2nd post-separation year

        For purposes of this subsection, the amount of the excess 
    payments for the 2nd post-separation year is the excess (if any) 
    of--
            (A) the amount of the alimony or separate maintenance 
        payments paid by the payor spouse during the 2nd post-separation 
        year, over
            (B) the sum of--
                (i) the amount of the alimony or separate maintenance 
            payments paid by the payor spouse during the 3rd post-
            separation year, plus
                (ii) $15,000.

                           (5) Exceptions

        (A) Where payment ceases by reason of death or remarriage

            Paragraph (1) shall not apply if--
                (i) either spouse dies before the close of the 3rd post-
            separation year, or the payee spouse remarries before the 
            close of the 3rd post-separation year, and
                (ii) the alimony or separate maintenance payments cease 
            by reason of such death or remarriage.

        (B) Support payments

            For purposes of this subsection, the term ``alimony or 
        separate maintenance payment'' shall not include any payment 
        received under a decree described in subsection (b)(2)(C).

        (C) Fluctuating payments not within control of payor spouse

            For purposes of this subsection, the term ``alimony or 
        separate maintenance payment'' shall not include any payment to 
        the extent it is made pursuant to a continuing liability (over a 
        period of not less than 3 years) to pay a fixed portion or 
        portions of the income from a business or property or from 
        compensation for employment or self-employment.

                      (6) Post-separation years

        For purposes of this subsection, the term ``1st post-separation 
    years'' means the 1st calendar year in which the payor spouse paid 
    to the payee spouse alimony or separate maintenance payments to 
    which this section applies. The 2nd and 3rd post-separation years 
    shall be the 1st and 2nd succeeding calendar years, respectively.

(g) Cross references

            (1) For deduction of alimony or separate maintenance 
        payments, see section 215.
            (2) For taxable status of income of an estate or trust in 
        the case of divorce, etc., see section 682.

(Aug. 16, 1954, ch. 736, 68A Stat. 19; Pub. L. 98-369, div. A, title IV, 
Sec. 422(a), July 18, 1984, 98 Stat. 795; Pub. L. 99-514, title XVIII, 
Sec. 1843(a)-(c)(1), (d), Oct. 22, 1986, 100 Stat. 2853, 2855.)


                               Amendments

    1986--Subsec. (b)(1)(D). Pub. L. 99-514, Sec. 1843(b), struck out 
``(and the divorce or separation instrument states that there is no such 
liability)'' after ``for such payments after the death of the payee 
spouse''.
    Subsec. (c)(2)(B). Pub. L. 99-514, Sec. 1843(d), substituted 
``specified in subparagraph (A)'' for ``specified in paragraph (1)''.
    Subsec. (f). Pub. L. 99-514, Sec. 1843(c)(1), amended subsec. (f) 
generally, substituting provisions for the recomputation of liability 
where there has been excess front-loading of alimony payments for 
provisions setting forth special rules to prevent excess front-loading 
of alimony payments.
    Subsec. (g). Pub. L. 99-514, Sec. 1843(a), added subsec. (g).
    1984--Pub. L. 98-369 amended section generally, substituting present 
provisions for provisions which had declared in: subsec. (a), a general 
rule as to decree of divorce or separate maintenance in par. (1), 
written separation agreement in par. (2), and decree for support in par. 
(3); subsec. (b), payments to support minor children; subsec. (c), 
principal sum paid in installments, par. (1) stating a general rule and 
par. (2) the rule where period for payment is more than 10 years; 
subsec. (d), the rule for husband in case of transferred property; and 
subsec. (e), cross references to sections 7701(a)(17), 215, and 682.


           Effective Date of 1986 Amendment; Transitional Rule

    Section 1843(c)(2), (3) of Pub. L. 99-514 provided that:
    ``(2) Effective dates.--
        ``(A) In general.--The amendment made by paragraph (1) [amending 
    this section] shall apply with respect to divorce or separation 
    instruments (as defined in section 71(b)(2)) of the Internal Revenue 
    Code of 1986 executed after December 31, 1986.
        ``(B) Modifications of instruments executed before january 1, 
    1987.--The amendments made by paragraph (1) [amending this section] 
    shall also apply to any divorce or separation instrument (as so 
    defined) executed before January 1, 1987, but modified on or after 
    such date if the modification expressly provides that the amendments 
    made by paragraph (1) shall apply to such modification.
    ``(3) Transitional rule.--In the case of any instrument to which the 
amendment made by paragraph (1) [amending this section] does not apply, 
paragraph (2) of section 71(f) of the Internal Revenue Code of 1954 [now 
1986] (as in effect on the day before the date of the enactment of this 
Act [Oct. 22, 1986]) shall apply only with respect to the first 3 post-
separation years.''


                    Effective Date of 1984 Amendment

    Section 422(e) of Pub. L. 98-369, as amended by Pub. L. 99-514, 
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
    ``(1) In general.--Except as otherwise provided in this subsection, 
the amendments made by this section [amending this section and sections 
215, 219, 682, 6676, and 7701 of this title] shall apply with respect to 
divorce or separation instruments (as defined in section 71(b)(2) of the 
Internal Revenue Code of 1986 [formerly I.R.C. 1954], as amended by this 
section) executed after December 31, 1984.
    ``(2) Modifications of instruments executed before january 1, 
1985.--The amendments made by this section shall also apply to any 
divorce or separation instrument (as so defined) executed before January 
1, 1985, but modified on or after such date if the modification 
expressly provides that the amendments made by this section shall apply 
to such modification.
    ``(3) Requirement of identification number.--Section 215(c) of the 
Internal Revenue Code of 1986 (as amended by subsection (b)) and the 
amendments made by subsection (c) [amending section 6676 of this title] 
shall apply to payments made after December 31, 1984.''


           Plan Amendments Not Required Until January 1, 1989

    For provisions directing that if any amendments made by subtitle A 
or subtitle C of title XI [Secs. 1101-1147 and 1171-1177] or title XVIII 
[Secs. 1800-1899A] of Pub. L. 99-514 require an amendment to any plan, 
such plan amendment shall not be required to be made before the first 
plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. 
L. 99-514, as amended, set out as a note under section 401 of this 
title.

                  Section Referred to in Other Sections

    This section is referred to in sections 121, 152, 215, 219, 220, 
382, 408 of this title.
