*276 Decision will be entered for the petitioners.
Husband and wife separated, discussed divorce, and entered into a written agreement providing for maintenance of wife and child. Divorce was not mentioned in the agreement, on advice of petitioner's counsel that it might cause charge of collusion. About one and one-half years later divorce proceeding was filed and divorce granted the wife in Nevada. The complaint stated that matters of maintenance and property had been agreed upon. The decree made no mention of alimony or maintenance. Held, payments made, under the agreement, were under a written agreement incident to divorce and deductible by the husband under sections 23 (u) and 22 (k), Internal Revenue Code.
*366 *277 This case involves income taxes for the calendar years 1946, 1947, and 1948, as to which years deficiencies were determined in the amounts of $ 516.04, $ 493.42, and $ 314.60, respectively. The single question presented is whether payments made by Bertram G. Zilmer (hereinafter called petitioner) to his former wife are deductible within the intendment of sections 23 (u) and 22 (k) of the Internal Revenue Code. We make the following findings of fact.
FINDINGS OF FACT.
The petitioners are husband and wife resident at Alexandria, Virginia. Their Federal income tax returns for the taxable years were filed with the collector for the district of Maryland. Petitioner Bertram G. Zilmer was formerly married, on September 29, 1926, to Joy Woody Zilmer. Of that marriage one daughter, Shirley Jo Zilmer, was born November 17, 1927.
The petitioner and his wife, Joy Woody Zilmer, experienced marital difficulties. About June 1933 they discussed divorce and the cost thereof. They were then living in Brooklyn. His wife's sister asked him how he felt about a divorce between him and his wife. About September 1933 the wife decided that she wished to go to El Paso, Texas, taking the child with*278 her. The petitioner moved to a small apartment in Manhattan. He took some of the household furniture, some was given to the wife's sister and mother, and a few pieces were put in storage. The wife took a boat to Galveston, Texas, and then went to El Paso. During the winter of 1933-1934 there were a few letters between the parties, reporting on the welfare of the child. In the spring of 1934 petitioner received a letter from his wife to the effect that she had thought things over, that she thought they ought to establish a home for the child and asking whether he was willing to take her back. He agreed and she returned about June 1, 1934. There was no complete reconciliation or resumption of a normal husband wife relationship. On New Year's Eve 1934 petitioner discovered that he had grounds for divorce. He left the apartment where he and his wife had been living and the next morning told her that he had seen an attorney on the subject of getting a divorce. She agreed to divorce him, he having decided after discussion of the matter with his attorney not to bring the suit himself but to allow her to do so. An agreement dated February 6, 1935, was drawn up and executed by the*279 petitioner and his then wife. It did not mention divorce because the attorney felt that there was danger of a charge of collusion being brought. At that time petitioner was earning $ 100 a week, employed *367 as night editor for the North American Alliance of New York City. He owned no automobile, stocks, bonds, corporate instrument of any kind, real property, jewelry, or objects of art. He and his wife had a joint savings account in a Brooklyn savings bank. His wife kept the book. About $ 300 or $ 400 therein had been depleted by the visit to Texas. They also had a joint checking account in a small bank in New Jersey where the balance on deposit averaged about $ 200. Petitioner has a $ 5,000 war risk insurance policy from the first World War and a $ 1,000 life insurance policy with the New York Life Insurance Company.
The agreement of February 6, 1935, recites, in pertinent part, that the petitioner resides at the Hotel St. George, Brooklyn, and that Joy Woody Zilmer resides at No. 42 Livingston Street, Brooklyn, that difficulties have arisen between them as a result of which they are now living separate and apart; that they decided to enter into articles of separation*280 for the purpose of confirming their separation; that they will continue to live separate and apart; that the child during minority is given to the wife who shall maintain, educate and support the child out of the allowance provided for; that she will reside with the child either in the city of New York or in commuting distance of the city of New York; that the petitioner shall have the right to custody of the child at certain times named; that the petitioner shall pay until August 31, 1935, the rent, telephone, gas and electric bills, the tuition fees of the child and $ 15 a week to the wife; but commencing September 1, 1935, he will pay $ 35 a week to the wife instead of the bills for rent, etc., and the $ 15 a week; that in the event his salary should decrease there would be a proportionate decrease in the payments; that the wife shall accept such provisions in lieu of any and all other provisions for her maintenance and education of the child, and agrees and covenants to indemnify and save petitioner harmless from any other claim and liability after the date of the agreement for the support and maintenance of her and the support, maintenance and education of the child during her*281 minority; that the wife shall not contract in the name of petitioner or subject him to liability for debt; that the wife shall have the right to use the furniture in her apartment but shall not dispose of it without petitioner's written consent, it being agreed that title to the furniture is jointly vested in both; and that the agreement shall be terminated at the death of either party.
On September 2, 1936, petitioner's wife filed a complaint against him in the District Court of Washoe County, Nevada, alleging, inter alia, that there is no community property of the plaintiff and defendant and that all property rights and all matters concerning support of the plaintiff and concerning the care, custody, control, support, maintenance, and education of their minor child have been settled and *368 adjusted by written agreement and that the plaintiff asks no order of the court with respect to any of such matters, and further alleging that defendant has been guilty of extreme cruelty and that absolute divorce is prayed for. On the same day divorce was granted to petitioner's wife. No reference is made in the divorce decree to property rights or to any agreement between the parties, *282 or to the child. The petitioner had given a written power of attorney to an attorney of Reno, Nevada, to represent him in any suit for divorce provided that the decree to be entered should contain the provisions of a written separation agreement dated February 6, 1935, between petitioner and Joy Woody Zilmer, and all amendments thereto and modifications thereof. The attorney by letter dated July 24, 1936, to the petitioner informed petitioner that his fees would be $ 70, also calling his attention to the restrictions contained in the power of attorney that appearance should not be made unless the decree of divorce contained provisions of the written separation agreement, modifications, etc. The date of such agreement is not mentioned in the letter. The letter refers to the agreement containing various requirements to the fact that the child shall be kept either in the city of New York or within commuting distance and the letter states, in effect, that such provision if presented to the court as proposed might possibly result in the decree being denied for want of sufficient evidence as to jurisdictional bona fide residence, and that he, the attorney, and the wife's attorney agree*283 that it would be equally safe and equally protective merely to allege in the complaint and state to the court that as to child, custody, property, etc., all have been taken care of by agreement mutually satisfactory to the parties. The attorney asks for a letter modifying the restriction in the power of attorney. Petitioner furnished the attorney a modified power of attorney.
Petitioner married his present wife in October 1936. Petitioner's New York attorney who drew the separation agreement still practices in New York City. Petitioner paid his wife's attorneys, both in New York and Reno, Nevada, paying $ 100 in New York and about $ 80 or $ 100 in Reno, also about $ 250 in transportation costs both ways.
During the taxable years ending November 17, 1948, which was the date of the twenty-first birthday of his daughter, the petitioner continued to pay his former wife $ 35 per week. The former wife has not remarried. On the income tax returns of the petitioner for the taxable years payments to Joy Woody Zilmer were claimed as follows: 1946, $ 1,820; 1947, $ 1,820; 1948, $ 1,625. These were the amounts paid by the petitioner.
OPINION.
Our only problem here is whether the payments*284 made by the petitioner were under a written instrument incident to *369 divorce, or under a decree of divorce, within the language of sections 22 (k) and 23 (u) of the Internal Revenue Code. 1 They were paid under an agreement of February 6, 1935, which nowhere mentions divorce. The decree makes no provisions for the payments; therefore we need not further consider it. Was the agreement "incident to such divorce"? (It is not contended that there was a legal separation so that element of the statute is eliminated.) The evidence is, in substance, that divorce was discussed between the parties, and that the wife agreed to divorce the petitioner, but that the agreement providing for the payments did not mention divorce because the petitioner's attorney felt that there was danger of a charge of collusion being brought. The divorce was not applied for or granted until more than a year and a half later. The petitioner contends that this was because of the expense which he was to bear. He did pay the expense of the divorce, about $ 450. At the time of the agreement he was earning $ 100 a week and had little other property. He was obligated to pay his wife $ 35 per week after*285 September 1, 1935. The divorce decree does not mention the payments or impose alimony for the reason that under the complaint there was no issue in that respect, the complaint having alleged that there was no community property and that matters of support, maintenance, and child custody and maintenance had been settled by written agreement. In Joseph J. Lerner, 15 T.C. 379">15 T. C. 379, there was, as here, a separation agreement providing for payments. The terms of the separation agreement were not incorporated in the divorce decree and the divorce, as here, made no provision for alimony payments. The decree was more than a year after the agreement. In holding that the petitioner's payments were not deductible under sections 22 (k) and 23 (u) we noted particularly that neither at the time of separation nor during the negotiations culminating in the separation agreement was *370 there any reference to or discussion of divorce by the parties. One paragraph of the instrument in that case provided that the obligation should continue during the life of the wife, unaffected by any decree of divorce, but this provision though discussed between the wife and her*286 attorney was never discussed by him with the petitioner or his counsel before the execution of the separation agreement. In distinguishing Jessie L. Fry, 13 T. C. 658; George T. Brady, 1192">10 T. C. 1192; and Thomas E. Hogg, 13 T. C. 361, we commented that they each contained facts which "indicated that a divorce was contemplated." Here such contemplation of divorce appears. In the Fry case divorce was discussed, in addition to being mentioned in writing. In this case there was discussion of divorce between the parties, and the reason mention thereof was left out of the agreement was the possibility of charge of collusion. Under these circumstances it seems to us that the payments made under the agreement were incident to a divorce. It is true that divorce was not even applied for for about one and one-half years, but considering the earnings of the petitioner, his lack of property, and the amount he was obligated to pay to his wife we think the delay is reasonably explained. The Lerner case seems, in the reverse, more akin to this one than any of the several cases we have had on *287 this general subject, which, being less applicable, need not here be discussed. The evidence there absent, as to discussion of divorce, is here present. Under the common connotation of the word "incident" we consider and hold that the agreement requiring the payments was incident to a divorce between the parties. We, therefore, conclude that the respondent erred in denying deductions of the payments made under such agreement, in the taxable years.
*288 Decision will be entered for the petitioners.
Footnotes
1. SEC. 22. GROSS INCOME.
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(k) Alimony, Etc., Income. -- In the case of a wife who is divorced or legally separated from her husband under a decree of divorce or of separate maintenance, periodic payments (whether or not made at regular intervals) received subsequent to such decree in discharge of, or attributable to property transferred (in trust or otherwise) in discharge 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 separation 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. * * *
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SEC. 23. DEDUCTIONS FROM GROSS INCOME.
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(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.
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