Alimony Tax Tips

Robert D. Flach of MainStreet.com provides the following advice regarding tax treatment of alimony:

To be deductible, alimony payments must be in cash (or check) and required as a condition of the divorce decree. You and your “ex” must not live together in the same household, and payments must end upon the death of the “ex.”

Deductible alimony is not limited to support payments. It includes payments made to a third party on behalf of your former spouse that are required under the terms of the divorce instrument. This could be payments for medical expenses, housing costs, taxes, tuition, life insurance premiums (if the former spouse owns the policy), etc. These payments are treated as received by your former spouse and then paid to the third party.

If you must pay all the mortgage payments (principal and interest) on a home you own jointly with your “ex” you can deduct half the payments as alimony. If you are required to pay all real estate taxes and/or insurance on a home held as “tenants in common” you can claim half as alimony, but if the home is held as “tenants by the entirety” or “joint tenants” none of the payments are deductible as alimony.

Keep in mind that alimony, for tax purposes, can be initiated by a marital settlement agreement ratified by a court order.

If you have questions regarding alimony, you may contact The Law Firm of Adam B. Cordover, P.A., to schedule a consultation via telephone at (813) 443-0615 or via our website at www.familydiplomacy.com.