13 T.C. 658">*658 By this proceeding petitioner challenges respondent's determination of a deficiency of $ 470.16 in income tax for the year 1945. The only question is whether payments in the aggregate amount of $ 1,900 received by petitioner from her former husband should be included in taxable income.

FINDINGS OF FACT.

Petitioner and her former husband, Thornton C. Fry, 1949 U.S. Tax Ct. LEXIS 55">*56 who were residents of New Jersey, were married in 1925 and began having serious marital difficulties in 1939 or 1940. In July 1942 petitioner learned the identity of a woman whom she suspected of having had adulterous relations with her husband. Throughout the year 1943 petitioner and her husband discussed the possibilities of a divorce, and during that year divorce was uppermost in both of their minds. The husband left the family residence and obtained a separate room in New York City in late November or early December of 1943. Petitioner and her husband were having discussions relating to the amount of money he would pay for her support. Both parties retained counsel.

In a letter to his lawyer dated November 17, 1943, petitioner's husband wrote:

It is my understanding that your fee for representing me in connection with all matters related to my wife's contemplated action for divorce will be $ 1,650.00, and that this is to cover all costs including counsel who may assist you.

13 T.C. 658">*659 The husband's lawyer replied in a letter dated December 30, 1943:

This acknowledges in writing that the moneys heretofore paid by you to me represent payment in full * * * for all services 1949 U.S. Tax Ct. LEXIS 55">*57 to be rendered by me in the event Mrs. Fry commences an action for divorce against you in the State of New York and you decide to appear therein or defend the action, and for the services of any attorney I may engage for you to appear for you or defend the action should she move to another State and commence a matrimonial action there against you and you decide to appear therein or defend the same.

On December 27, 1943, petitioner and her husband executed a written instrument, hereinafter called the support agreement, in which the husband agreed to pay petitioner $ 237.50 per month "in full settlement and discharge of all obligations to support" petitioner and "in lieu of all alimony, separate maintenance, dower, right or claim." The support agreement provided that:

Ninth: In the event any divorce or other matrimonial action shall be brought by either of the parties hereto against the other, the provisions of this agreement shall govern all allowances for alimony or separate maintenance and shall be in complete and absolute satisfaction of any claim or right of the second party against the first party for such alimony, separate maintenance or allowance, and the provisions hereof may1949 U.S. Tax Ct. LEXIS 55">*58 be incorporated in the said decree, but such incorporation shall not be deemed a merger of this agreement. It being the intention of the parties that this agreement shall survive such decree.

At the time the above agreement was executed, petitioner's husband believed that petitioner would seek to obtain a divorce decree at Reno, Nevada, and he simultaneously deposited a check with her attorney to cover her expenses in going to Reno.

Petitioner and her husband continued to live apart after executing the support agreement. In January or February of 1945 her husband asked her to sue for a divorce, but she refused, saying it was not convenient for her to go to Reno at that time. In February 1945 her husband authorized his lawyer to make petitioner an offer to produce evidence of his adultery if she would then sue for divorce. Petitioner accepted the offer, and in March 1945, in a letter to her attorney, her husband gave information concerning acts of adultery committed by him in 1942, all "without the knowledge, consent, connivance, privity or procurement of my wife" who "knew nothing of these incidents until the disclosures I have made in this paper."

On April 11, 1945, petitioner1949 U.S. Tax Ct. LEXIS 55">*59 sued for divorce in New York on grounds of adultery, and in her complaint she did not request that the decree contain provisions for her support because that had been provided for under the support agreement.

In his answer to the complaint petitioner's husband requested that the court incorporate in its decree the provisions of the support agreement quoted above.

After a trial in the New York divorce proceeding the court entered an interlocutory decree of divorce on April 11, 1945, and a final decree 13 T.C. 658">*660 on July 12, 1945. The interlocutory decree contained no provisions concerning alimony or other payments to petitioner. The final decree ordered the husband to name petitioner as beneficiary in several insurance policies, but did not refer to the support agreement.

Respondent determined the deficiency in issue by increasing petitioner's taxable income by the amount of $ 1,900, which she received subsequent to her divorce in 1945 as payments under the support agreement.

The payments in controversy, in the aggregate amount of $ 1,900, were made to discharge the support obligations of petitioner's former husband under a written instrument incident to a divorce.

OPINION.

We are1949 U.S. Tax Ct. LEXIS 55">*60 confronted by a narrow phase of the alimony provisions (sections 22 (k), 23 (u)¹) in what the parties insist is a case of first impression. We prefer to view it rather as requiring the application of recognized principles to a set of facts varying somewhat in detail from those previously considered.

1949 U.S. Tax Ct. LEXIS 55">*61 There seems little room for much dispute as to the evidentiary facts. Petitioner, who lived in New Jersey, and her husband, who had moved to New York, contemplated a Reno divorce. A support agreement was signed on this assumption. Petitioner first delayed and then refused to institute the proceedings. After some further discussion, a New York divorce suit was commenced on the strength of confessions furnished by the husband. This suit was prosecuted to a conclusion, the decree making no mention of the prior agreement. On these facts, when the statute speaks of payments under "an agreement incident to such divorce," does it include the New York decree or only the abortive Nevada one which the parties originally had in mind?

It is clear, of course, that "divorce" in the statute means the decree and not a general status. Frederick S. Dauwalter, 9 T.C. 580. And an agreement made subsequent to one proceeding will not be viewed 13 T.C. 658">*661 as incident to it, merely because made to avoid another. Benjamin B. Cox, 10 T.C. 955; affd. (C. A., 3d Cir.), 176 Fed. (2d) 266. But here the parties1949 U.S. Tax Ct. LEXIS 55">*62 unquestionably proceeded with a divorce decree in mind. Wherever granted, a decree so obtained would thus be one to which the agreement was "incident." Robert Wood Johnson, 10 T.C. 647. And delay in obtaining the decree has been sufficiently explained to eliminate the objection that the interval between agreement and decree was so great as to preclude any connection between them. See George T. Brady, 10 T.C. 1192, 1198; cf. Miriam Cooper Walsh, 11 T.C. 1093.

In the Brady case, a New York divorce action was thought to be pending when the agreement was made. We said:

* * * The forum was shifted from New York to Massachusetts for undisclosed reasons. However, the divorce itself is the vital factor in our problem, not the jurisdiction in which prior actions may have been begun. * * *

We are not adequately informed as to petitioner's reasons for changing her mind about the Nevada divorce proceeding. But if one had been commenced and then abandoned in favor of a resort to the New York courts, the resulting decree would have been, as it was in George T. Brady, supra,1949 U.S. Tax Ct. LEXIS 55">*63 and as it is here "the vital factor in our problem." Since we can not doubt that the agreement was reached in anticipation of a divorce and that one was ultimately prosecuted to decree, and since all other requirements of section 22 (k) are fulfilled, petitioner must be held liable for tax on the payments thereunder. See Tuckie G. Hesse, 7 T.C. 700; Thomas E. Hogg, 13 T.C. 361.

Decision will be entered for the respondent.