*151 Decision will be entered under Rule 50.
1. An agreement between the petitioner and his wife, incident to a decree of divorce, provided for the payment by him of $ 35,000 to purchase a home for her and their daughter, and the payment of her attorneys' fees in the divorce proceeding in the amount of $ 20,000. The agreement further provided for monthly payments to her throughout the lifetime of the parties. He paid the $ 35,000 and the $ 20,000 immediately after the divorce. Held that such payments were not periodic payments within section 22 (k) of the Internal Revenue Code.
2. The petitioner paid fees to his own attorneys for services in connection with the divorce decree and the negotiations leading to and preparation of the agreement of settlement. Held that such attorneys' fees are not deductible by him under section 23 (a) (2) of the Internal Revenue Code. Lindsay C. Howard, 157">16 T. C. 157.
*1418 This case involves income tax for the calendar year 1947. Deficiency was determined in the amount of $ 81,010.49. Because of mutual concessions by the parties the entire amount is not involved. The questions presented are (1) whether petitioner is entitled to deduction under sections 22 (k) and 23 (u) of the Internal Revenue Code of (a) $ 35,000 paid to his divorced wife pursuant to a property settlement and (b) $ 20,000 paid to her attorneys for legal fees in connection with the divorce proceeding; and (2) whether petitioner is entitled to the *1419 deduction of $ 16,500 paid to his own attorneys for legal fees in connection with the divorce proceeding. We make the following findings of fact.
FINDINGS OF FACT.
The stipulated facts are found as stipulated.
The petitioner, a resident of St. Louis, Missouri, filed his Federal income*153 tax return for the calendar year 1947 with the collector for the first district of Missouri, St. Louis, Missouri. The return was filed on the cash receipts and disbursements basis.
Petitioner was married to Mary E. Baer on July 27, 1936. They had one child, Mary Ann Baer, who in 1946 was about nine years old. On December 14, 1946, Mary E. Baer filed in St. Louis, Missouri, suit for divorce, alimony and for custody and support of minor child and other relief. The petition therein recited that he had property of several millions of dollars. Petitioner did not file an answer to the petition for divorce. On July 10, 1947, petitioner and Mary E. Baer executed an agreement denominated "IN LIEU OF COURT DECREE AS TO ALIMONY, SUPPORT MONEY AND OTHER MATTERS." On the same day decree of divorce was entered in favor of Mary E. Baer. The agreement was incident to the divorce proceeding and divorce decree.
The agreement in material part provided in substance that it was deemed to be to the best interest of both parties that all property rights growing out of marital relations, including dower rights and any right of Mary E. Baer in the petitioner's personal property then owned or thereafter*154 owned be fixed and agreed upon and that provision be made for payments in discharge of all legal obligations imposed upon the petitioner because of the marital or family relationship; that Mary E. Baer had taken the position that she was entitled to alimony payments in gross rather than in periodic payments, which position had been challenged by petitioner, but that she had agreed to modify and reduce her original demands in consideration of the obligation of petitioner to continue the payments provided irrespective of her remarriage and his agreement to cause his executors or administrators to make a further payment in the event he should predecease her; that there was pending an action by her against him for replevin of a certificate for 5,000 shares of common stock, of the value of $ 50,000, of Stix, Baer and Fuller Company, standing in her name on the books of the company but the certificate for which was in possession of the petitioner, and for $ 80,000 damages for detention and that it was determined to the best interest of both parties to settle such matter; the parties therefore agreed should the Court determine that Mary E. Baer was entitled to be divorced and enter a decree*155 of divorce, she would immediately *1420 after the entry thereof in consideration of $ 15,000 in cash quitclaim to petitioner the property comprising his residence and forever bar herself from asserting any dower right in his personal property; that in discharge of the legal obligation imposed upon petitioner because of the marital relationship, including the obligation to contribute to the support and maintenance of Mary E. Baer, he would pay her immediately after the entry of decree the lump sum of $ 35,000 to enable her to purchase and pay for a certain named property as a home for herself and her daughter; and that he would pay to her attorneys the sum of $ 20,000 in full of any claim which may or might be made upon him for compensation for her attorneys for services rendered to her for which he might be liable, including all services in connection with the divorce suit and the suit involving the stock; that upon the entry of the decree of divorce on the first day of each month for 5 months he would pay her $ 2,916.66 and thereafter so long as both parties should live or irrespective of her remarriage, the sum of $ 1,458.33, and that in the event of his death prior to that*156 of Mary E. Baer his executors or administrators would pay to a responsible insurance company the sum necessary to provide for her $ 1,250 for the rest of her life; and that immediately after the entry of the decree of divorce petitioner would deliver to Mary E. Baer the stock certificate and she would dismiss the suit involving same, he to keep the right to vote the stock and she to restrict her right to sell or otherwise dispose of it. The agreement further provided that before trial of the divorce action she would amend her petition to eliminate any prayer for alimony and for support of the daughter and that any decree of divorce entered should contain no provision for alimony or support of the daughter or any sum for the prosecution of the suit and that separate stipulation to be filed in the divorce action would be entered providing for a decree of division of custody of the child.
The divorce decree entered on July 10, 1947, recited in material part that the plaintiff appeared in person and by attorney and that the defendant appeared by attorneys; that the plaintiff was found the innocent and injured party and entitled to relief, that divorce was granted, that the custody of*157 the child be awarded in accordance with the stipulation of the parties, which stipulation is set forth in full. The decree contains no reference to the stipulation of the parties of July 10, 1947 (except the separate stipulation as to the child), and contains no reference to alimony, property or settlement thereof.
On July 10 after the entry of the decree of divorce and pursuant to the agreement above referred to by the petitioner and his wife, petitioner paid Mary E. Baer $ 35,000 and paid her attorneys $ 20,000.
Petitioner had two attorneys in the matter of the divorce and property settlement. To one of them he paid $ 10,000 of which about ninety *1421 per cent was received for services rendered in connection with the form and amount of alimony to be paid to the wife. To the other attorney he paid $ 8,787.60 of which about eighty per cent was paid for services in the negotiation of the form and amount of alimony.
In his income tax return for 1947 petitioner reported as income $ 100,519.57 as salary from Stix, Baer and Fuller Company and $ 9,223.55 income from a trust. His dividends from Stix, Baer and Fuller Company were in excess of $ 135,000. The petitioner was in 1947, *158 and still is, president of Stix, Baer and Fuller Company and in 1947 owned, and now owns, a substantial amount of stock in that company.
Petitioner and his wife and their attorneys were negotiating from about September 1946 until July 10, 1947, relative to the marital rights and obligations of petitioner and his wife. At first a reconciliation was attempted but it soon appeared that that would be hopeless and thereafter most of the negotiations were spent on financial aspects of the matter. She initially asked for one-sixth of petitioner's gross estate. Her attorney stated that he understood petitioner's estate to amount to from $ 6,000,000 to $ 8,000,000 and that she was asking for from $ 1,000,000 to $ 1,333,000. Most of the petitioner's property consisted of securities, a substantial portion thereof being represented by stock of Stix, Baer and Fuller Company. The petitioner resisted his wife's effort to obtain a gross settlement because he was extremely concerned about the possibility of breaking up his solid block of stock in Stix, Baer and Fuller Company, as it might affect his control and future in the business.
During the negotiations between petitioner, his wife, and *159 their respective attorneys there were discussions of the wife's demand for alimony, the dispute and replevin action as to the 5,000 shares of Stix, Baer and Fuller stock, a dispute as to some insurance which had been taken out on petitioner's life by his wife and was being paid for out of the proceeds of a trust which he had created, problems as to the custody and support of a minor child, and attorneys' fees for the wife. The attorneys for petitioner prepared documents in connection with these matters and represented him at the divorce proceeding. The divorce proceeding itself was very brief.
OPINION.
After elimination of certain other questions by mutual concessions and stipulation of the parties, we are left with the question whether the Commissioner erred in denying deduction of the $ 35,000 paid petitioner's wife for the purchase of a home, the $ 20,000 paid to her attorneys, and the amounts paid to the petitioner for his own attorneys. We will consider the points separately.
*1422 With reference to the $ 35,000 paid petitioner's wife on July 10, 1947, the petitioner contends that it is a periodic payment within the text of section 22 (k) of the Internal Revenue Code. *160 The parties are in agreement that the payment was made under an agreement incident to divorce. The petitioner points out that it was not an installment payment, which under section 22 (k) is not to be considered a periodic payment unless it is paid upon a principal sum which may be or is to be paid within ten years. We agree that it is not an installment payment; for the periodic payments here involved were to last the lifetime of the parties. That conclusion, however, does not determine the question whether the payment was periodic. The petitioner also suggests that his attorneys, who drafted the settlement agreement, intended that the $ 35,000 (as well as the $ 20,000 attorneys' fees and the monthly payments) should be part of a single unified plan for discharging petitioner's alimony obligations. Such intent is considered but only along with all of the other facts and circumstances involved. After review of the entire situation in the light of the statute we are of the opinion that the $ 35,000 was not a periodic payment. In the first place there appears a peculiar illogic in considering two payments, both made upon the same day (that is, the $ 35,000 payment for the house*161 and the $ 20,000 payment for attorneys' fees) as periodic. In Webster's New International Dictionary we find, among the definitions of "periodic" the terms "characterized by periods; occurring at regular stated times; acting, happening, or appearing, at fixed intervals; loosely, recurring; intermittent." The statute, of course, eliminates regularity of interval. Nevertheless, we think it obvious that taking the word with any ordinary connotation it calls for payments in sequence, and distinguishes any payments standing alone. The petitioner perhaps tacitly so recognizes, for it is his contention that the $ 35,000 payment was in effect merely one of the series of payments to be made to the wife. We do not agree. Though we recognize that Frank J. Loverin, 10 T. C. 406, involved payment of a total amount in full discharge of alimony liability, and that Barbara B. LeMond, 13 T. C. 670, and Joseph D. Fox, 14 T. C . 1131, involved amounts paid prior to divorce decree, whereas the periodic payments mentioned in section 22 (k) are only those "received subsequent to such decree," nevertheless *162 as we stated in Ralph Norton, 16 T. C. 1216, the fact that the statute particularly refers to periodic payments is some indication that another kind of payment, that is, an initial payment, was by Congress considered in a different category, and we think Congress intended to distinguish in divorce matters under this section between lump sum original payments payable at or near the time of divorce, and later monthly or otherwise periodic payments for current support. We can not agree with petitioner's statement *1423 that the $ 35,000 was for current support. It was for the purchase of a home. The concept advocated by the petitioner on this particular point is inconsistent with the view taken by us in Lemuel Alexander Carmichael, 14 T. C. 1356. It is true, of course, that that case involved a fixed total liability, whereas the total liability is here not so fixed; but the Carmichael case is analogous to this one in that petitioner there and the petitioner here attempt to link together as unitary, separate provisions, that is, monthly periodic payments with other payments. We conclude and hold that the $ 35,000*163 was not a periodic payment and the petitioner is not entitled to deduct same under section 22 (k).
With respect to the $ 20,000 paid by petitioner to the attorneys for his wife, he makes it very definite on brief that this is not claimed as a legal expense, stating: "We emphasize that we seek to deduct this $ 20,000 payment as a periodic alimony payment, and not as a legal expense." This payment, like the $ 35,000 for the home for petitioner's wife, was paid and payable only once and for a definite non-recurring purpose. The same reasoning applied above to the matter of the $ 35,000 payment here applies to forbid a conclusion that it was a periodic payment. We hold that it was not and, therefore, that the Commissioner did not err in disallowing the deduction of the $ 20,000 paid to the wife's attorneys.
We next come to the petitioner's contention that his expenses for attorneys' fees in the divorce proceeding are deductible by him under section 23 (a) (2) of the Internal Revenue Code, allowing deduction for expenses paid or incurred for the management, conservation or maintenance of property held for the production of income. On brief he limits his claim to $ 16,500. Lindsay C. Howard, 157">16 T. C. 157,*164 to which, though cited by the respondent in his brief, the petitioner does not advert either in reply brief later filed or in his earlier brief, clearly decides this matter against the petitioner's contention. We held that expenses of a husband, in defense of an action to collect payments under a property settlement in connection with a divorce decree, were not deductible by him, saying: "The contention that such expenditures are allowable as expenses of retaining income previously earned leaves us unmoved." The property settlement and divorce had taken place in 1938 but the litigation, the attorneys' fees in which the petitioner sought to deduct, was in 1942 or later. It is, therefore, apparent that section 23 (a) (2) was then in effect and relied upon. We further said that the whole situation involved personal (as distinguished from business) relationships, and personal considerations. In short, under the Howard case the personal nature of the expenses is not overcome by the provisions of section 23 (a) (2) as to conservation or maintenance of property held for production of income. Since petitioner on brief agrees that "The only issue with respect to the deductibility *165 of *1424 attorneys' fees is thus clearly pointed -- whether or not these attorneys were employed by Petitioner to conserve his income-producing property," the Howard case requires denial of his contention. We conclude and hold that the attorneys' fees paid by petitioner to his own attorneys were not deductible by him under section 23 (a) (2) of the Internal Revenue Code. On account of certain mutual concessions by the parties,
Decision will be entered under Rule 50.