 | John Gibson
is a senior partner in the Wichita law firm of Gilliand & Hayes. He has been practicing law for nearly 30 years. In addition to healthcare law his practice includes wills, trusts, estate planning, probate and general representation of individuals and small business. Contact information: Phone:
316-264-7321; Fax: 316-264-8614; and e-mail: jgibson@boyerds.com |
Legal
2003-07-01 10:56:00
Deducting alimony
ANSWER: Payments made to a former spouse certainly can qualify, but do not always qualify, for the alimony deduction. In order to qualify the payments must be properly structured as alimony or support payments for the former spouse or separating spouse. The proper preparation of the written divorce or separation documents are very important to the question of deductibility. For example, in a recent case a man claimed that a payment made to his former wife's attorney qualified as alimony and was therefore tax deductible. The Court disagreed and disallowed the deduction because it found that, under state law, the man would remain liable for this obligation to the attorney even if the spouse died. As a general rule, in order to qualify for an alimony deduction payment, it should be described as alimony or spousal support in a written divorce or separation document. This also will require that the recipient will have to include the payment in his or her gross income. That is, the man can exclude the alimony payments from his gross income, but only if the former wife includes the payment in her gross income and pays tax on it. Further, such documents should specifically provide that the liability for payment terminates upon the death of the spouse that is receiving the payment. Make sure you seek advice from a legal or tax professional before entering into such an agreement.
