Page:United States Statutes at Large Volume 56 Part 1.djvu/845

 56 STAT.] 77TH CONG., 2D SESS. -CH. 619-OCT. 21, 1942 charge of, a legal obligation which, because of the marital or family relationship, is imposed upon or incurred by such husband under such decree or under a written instrument incident to such divorce or sepa- ration shall be includible in the gross income of such wife, and such amounts received as are attributable to property so transferred shall not be includible in the gross income of such husband. This subsection shall not apply to that part of any such periodic payment which the terms of the decree or written instrument fix, in terms of an amount of money or a portion of the payment, as a sum which is payable for the support of minor children of such husband. In case any such periodic payment is less than the amount specified in the decree or written instrument, for the purpose of applying the preceding sentence, such payment, to the extent of such sum payable for such support, shall be considered a payment for such support. Installment payments dis- charging a part of an obligation the principal sum of which is, in terms of money or property, specified in the decree or instrument shall not be considered periodic payments for the purposes of this subsection; except that an installment payment shall be considered a periodic payment for the purposes of this subsection if such principal sum, by the terms of the decree or instrument, may be or is to be paid within a period ending more than 10 years from the date of such decree or instrument, but only to the extent that such installment payment for the taxable year of the wife (or if more than one such installment payment for such taxable year is received during such taxable year, the aggregate of such installment payments) does not exceed 10 per centum of such principal sum. For the purposes of the preceding sentence, the portion of a payment of the principal sum which is allocable to a period after the taxable year of the wife in which it is received shall be considered an installment payment for the taxable year in which it is received. (In cases where such peri- odic payments are attributable to property of an estate or property held in trust, see section 171 (b).)" (b) DEDUCTON FOR AMOUNTS PAID.- Section 23 (relating to deduc- tions from gross income) is amended by inserting at the end thereof the following new subsection: "(u) ALIMONY, ETC., PAYMENTS.- In the case of a husband described in section 22 (k), amounts includible under section 22 (k) in the gross income of his wife, payment of which is made within the husband's taxable year. If the amount of any such payment is, under section 22 (k) or section 171, stated to be not includible in such husband's gross income, no deduction shall be allowed with respect to such payment under.this subsection." (c) INCOME FROM TRuSTs.- Supplement E of Chapter 1 is amended by inserting at the end thereof the following new section: "SEC. 171. INCOME OF AN ESTATE OR TRUST IN CASE OF DIVORCE, ETC. "(a) INCLUSION IN GROSS INCOME.- T here shall be included in the gross income of a wife who is divorced or legally separated under a decree of divorce or of separate maintenance the amount of the income of any trust which such wife is entitled to receive and which, except for the provisions of this section, would be includible in the gross income of her husband, and such amount shall not, despite section 166, section 167, or any other provision of this chapter, be includible in the gross income of such husband. This subsection shall not apply to that part of any such income of the trust which the terms of the decree or trust instrument fix, in terms of an amount of money or a portion of such income, as a sum which is payable 65714-43 - -PT. I ---52 817 Installment pay- ments. Padi, p. 818. 63 Stat. 12. 26U..C.123; Supp. I, §23. Ante, p. 816. Infra. 68 Stat. 68. 26 US. o.. 161- 170. 53 Stat. 68. 26 U. S. C. I{166, 167.

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