Dorothy Olster v. Commissioner of Internal Revenue Service

HATCHETT, Circuit Judge:

In this tax case, 79 T.C. 456, we decide the tax consequences arising out of the transfer of mortgages and a promissory-note from an ex-husband of the taxpayer, where the transfer occurred when the ex-husband was in arrears in alimony payments. We affirm.

Facts

Dorothy Olster and her husband executed a property settlement and custody agreement (original agreement) dated April 6, 1972, providing that petitioner would re*1170ceive $2,500 per month alimony for life. Upon remarriage, however, petitioner would only be entitled to a lump sum amount equal to two years’ alimony, or…