court ordered house payments are considered alimony paid

[bstoned]

What is the name of your state? MI

I was married for 15 years and was stricken with aortic aneurysms. This was my second marriage and his first (I am an admitted repeat offender!). Following my second catastrophic surgery within six months, my "poor pitiful" husband engaged in an extra marital affair. As a result of serious complications following the second surgery, I was intubated for three weeks. After two weeks, Mr Smartguy asked that I be taken off and "let go". His trial run as the poor grieving young widower was thwarted by my adult daughter from my first marriage. I remained on life support for another week. Oops, shame on me. I'll NEVER do THAT again! My spouse was sooo enraged that I survived, he became violent and physically abusive. He is now a common cheater, not the grieving widower. He decided to "perform home surgery" on me with a twelve inch kitchen knife. This led to his second arrest within four months for domestic assault.

He was raised by a very prominent political figure (lawyer) and was taught that "if no one sees you do it, you didn't do it". That theory did not hold up in court when he filed for divorce. The last "stab" at me was to award himself the four cats and weiner dog. He was kind enough to "give me the bird". I had a twenty year old bird which I brought into the marriage. He gave me more than the bird in the cage, I might add. When it came time to take the final judgment, he was ordered to live with his parents. He was not allowed to have pets in their home. My attorney and I agreed that I would keep the pets. OH, wait just a minute! In addition to paying me alimony, my former spouse was ordered to pay "petimony" in addition to medical expenses for the pets. Gee, all I can say is, "hope his companion swallowed!". Whoa! Did I say that? Yessiree I did! I was ordered to pay the house payments on the marital home until it was sold. Little did Lawyerboy Jr know, that the IRS recognizes half of those payment as alimony paid by me to him and is taxable income to him and deductible to me. The petimony is not considered taxable income. Anybody out there ever dealt with this type of arrangement?

 

[LdiJ]

What is the name of your state? MI

I was married for 15 years and was stricken with aortic aneurysms. This was my second marriage and his first (I am an admitted repeat offender!). Following my second catastrophic surgery within six months, my "poor pitiful" husband engaged in an extra marital affair. As a result of serious complications following the second surgery, I was intubated for three weeks. After two weeks, Mr Smartguy asked that I be taken off and "let go". His trial run as the poor grieving young widower was thwarted by my adult daughter from my first marriage. I remained on life support for another week. Oops, shame on me. I'll NEVER do THAT again! My spouse was sooo enraged that I survived, he became violent and physically abusive. He is now a common cheater, not the grieving widower. He decided to "perform home surgery" on me with a twelve inch kitchen knife. This led to his second arrest within four months for domestic assault.

He was raised by a very prominent political figure (lawyer) and was taught that "if no one sees you do it, you didn't do it". That theory did not hold up in court when he filed for divorce. The last "stab" at me was to award himself the four cats and weiner dog. He was kind enough to "give me the bird". I had a twenty year old bird which I brought into the marriage. He gave me more than the bird in the cage, I might add. When it came time to take the final judgment, he was ordered to live with his parents. He was not allowed to have pets in their home. My attorney and I agreed that I would keep the pets. OH, wait just a minute! In addition to paying me alimony, my former spouse was ordered to pay "petimony" in addition to medical expenses for the pets. Gee, all I can say is, "hope his companion swallowed!". Whoa! Did I say that? Yessiree I did! I was ordered to pay the house payments on the marital home until it was sold. Little did Lawyerboy Jr know, that the IRS recognizes half of those payment as alimony paid by me to him and is taxable income to him and deductible to me. The petimony is not considered taxable income. Anybody out there ever dealt with this type of arrangement?

Where did you get the information that you paying the house payments while living in the home constitutes partial alimony to him? (I am not necessarily questioning/disagreeing with you, I seriously want to know..and particularly any case law references if you have them)...normally that it all part of the property settlement and is dealt with, within the property settlement.

There may be some people here that will slam you for your "attitude"...I am not one of them. You survived, and obviously survived with your mental facilities intact.....he is obviously a Scott Peterson wantabee and fully deserves whatever you have to say. Thank god for your daughter.

 

[bstoned]

Court ordered house payments

The information regarding the issue of court ordered house payments can be found in IRS Publication 504. Please see the section entitled "alimony". While the divorce action was pending, my former husband insisted on referring to the total amount of financial support he was contributing as "an act of generosity". Had he chosen to term it as "spousal support/alimomy, it would have been considered tax deductible to him and taxable income to me. The IRS does not recognize "acts of generosity" as being deductible. Either my former husband was preparing these documents himself, or his lawyer was inept.

 

[LdiJ]

The information regarding the issue of court ordered house payments can be found in IRS Publication 504. Please see the section entitled "alimony". While the divorce action was pending, my former husband insisted on referring to the total amount of financial support he was contributing as "an act of generosity". Had he chosen to term it as "spousal support/alimomy, it would have been considered tax deductible to him and taxable income to me. The IRS does not recognize "acts of generosity" as being deductible. Either my former husband was preparing these documents himself, or his lawyer was inept.

Hon, go back and look at that more carefully...yes, you can deduct 1/2 of the house payment, homeowners insurance and real estate taxes as alimony....however, at the same time you are then limited to only taking 1/2 of the interest expense, and real estate taxes as itemized deductions. Therefore, unless significantly more than 50% of the mortgage payment is going to principal rather than interest....you may come out ahead by not claiming that as alimony and taking the full interest and real estate taxes as itemized deductions instead.

While I understand the argument that you are making about the "act of generosity" terminology...and while you might have some slight chance of prevailing on that issue with the IRS, my experience as a tax preparer indicates otherwise....my experience indicates that the IRS will consider those payments to be alimony.

 

[bstoned]

tax consequence of court ordered house payments

I researched the issue of the court ordered house payments and was aware that I would be entitled to only half of the interest. Given the physical effects of the knife attack in addition to the catastrophic surgeries to repair the aneurysms, I was unemployed. The way the separation agreement was set up, I had no income to be taxed on. I presented the facts to the judge hearing the divorce action and was told, with clarity, that my former spouse "knew what he was doing and to leave it alone". I was publicly scolded for questioning the "kindness". I made contact with several agents representing the IRS and was told to file a return showing zero income. The payments for my support were paid by my former father-in-law. My former spouse has lived most of his adult life utilizing his father's income. In an effort to avoid having to expose this, the generosity terminolgy was chosen. The amount of support paid to me well exceeded any legitimate income my ex would be able to account for.

As I mentioned in my first post, I was viciously attacked by my then husband. I paid the medical expenses, to include medical insurance, out of the alimony I received following the finalization of the divorce. The out of pocket medical expenses, in addition to the house payments brought my tax liability close to zero. After claiming the "alimony paid by me" my liability was zero. I was due a very minimal amount of monies to be refunded.

I presented the issue of the court ordered payments being considered alimony paid and was unable to find anyone who was familiar with the scenario. Glad to hear you are knowledgeable in this particular arena. Have any of your clients been in this situation? I dug this information out on my own believing it was somewhat common. Am I mistaken? My understanding is that since the payments were building shared equity in the house, it would be reasonable to expect the payee to absorb half of the expense.

 

[LdiJ]

I researched the issue of the court ordered house payments and was aware that I would be entitled to only half of the interest. Given the physical effects of the knife attack in addition to the catastrophic surgeries to repair the aneurysms, I was unemployed. The way the separation agreement was set up, I had no income to be taxed on. I presented the facts to the judge hearing the divorce action and was told, with clarity, that my former spouse "knew what he was doing and to leave it alone". I was publicly scolded for questioning the "kindness". I made contact with several agents representing the IRS and was told to file a return showing zero income. The payments for my support were paid by my former father-in-law. My former spouse has lived most of his adult life utilizing his father's income. In an effort to avoid having to expose this, the generosity terminolgy was chosen. The amount of support paid to me well exceeded any legitimate income my ex would be able to account for.

As I mentioned in my first post, I was viciously attacked by my then husband. I paid the medical expenses, to include medical insurance, out of the alimony I received following the finalization of the divorce. The out of pocket medical expenses, in addition to the house payments brought my tax liability close to zero. After claiming the "alimony paid by me" my liability was zero. I was due a very minimal amount of monies to be refunded.

I presented the issue of the court ordered payments being considered alimony paid and was unable to find anyone who was familiar with the scenario. Glad to hear you are knowledgeable in this particular arena. Have any of your clients been in this situation? I dug this information out on my own believing it was somewhat common. Am I mistaken? My understanding is that since the payments were building shared equity in the house, it would be reasonable to expect the payee to absorb half of the expense.

Its not common at all....because usually there are some sort of court orders/agreements that end up balancing out house payments made by one spouse pending a sale of a residence...balanced out by the equity division or in other ways. In other words its treated as part of the property settlement, and payouts related to property settlements are non deductible.

As far as the "alimony" paid to you is concerned...don't be surprized if he does take that as a deduction....and does not report the house payment money as income. You may end up dealing with an IRS investigation on this for those two reasons. You can easily prove your point regarding the house payments....but the monies paid to you could get stickier. In the end you may be able to prevail....but do expect an investigation in about a year or so.

 

[bstoned]

alimony was declared on tax return

The terms of the spousal support agreement were very explicit regarding the tax issue. Without hesistation, I declared the payments received, in addition to third party payments made by my former husband (a leased vehicle I retained following the divorce). I am most certain my former spouse has absolutely no idea that the court ordered house payments are considered (one half) alimony paid to him. Given his history of violence and deceit, I made absolutely certain that what I was doing was legitimate.

Needless to say when the former marital home was sold it was very complicated. My former husband cozied up with the female buyer and paid her lawyer to sue me for "undisclosed defects". Every imaginable/known problem was disclosed prior to closing. All parties involved agreed to, and signed, the disclosure statement. The property was inspected by the buyers' inspector of choice, prior to, and post closing. The purchase agreement contained a clause requiring any problems to be arbitrated. This clause survives the closing. It was also sold "as is" following the multiple inspections.

In the continued vigorous attempts to bring financial harm to me, the buyer brought a lawsuit against only me. Curiously, the buyers attorney was not familiar with arbitration. I explained in my answer to the complaint that the arbitration clause prohibits civil litigation. The judge was in agreement and issued an order referring the case to arbitration within a limited period of time. Time passed and the buyer was unable to produce the initial filing fee. The monies being sought were very close to the amount I received from the sale of the home. The amount of "undislcosed problems" were rather phenomenal, and in my defense, I raised the issue of how these problems were not discovered during the multiple inspections. I also raised the issue of sole liabilty when in fact I was a co-seller/co-owner.

I prepared a motion to have the case dismissed and vacated with prejudice and today my motion was granted. As luck would have it, the judge was quite familiar with my situation. My former husband stood before him the first time he was arrested for assaulting me. Four months later, this same judge bound him over to circuit court for the second assault as it involved four felony counts. At the hearing today I stood alone, without counsel. The opposing party failed to appear. Following his ruling, this judge discreetly advized me to proceed with extreme caution from this day forward. I was advized not to "travel alone".

Further input would be greatly appreciated!

 

[LdiJ]

The terms of the spousal support agreement were very explicit regarding the tax issue. Without hesistation, I declared the payments received, in addition to third party payments made by my former husband (a leased vehicle I retained following the divorce). I am most certain my former spouse has absolutely no idea that the court ordered house payments are considered (one half) alimony paid to him. Given his history of violence and deceit, I made absolutely certain that what I was doing was legitimate.

Needless to say when the former marital home was sold it was very complicated. My former husband cozied up with the female buyer and paid her lawyer to sue me for "undisclosed defects". Every imaginable/known problem was disclosed prior to closing. All parties involved agreed to, and signed, the disclosure statement. The property was inspected by the buyers' inspector of choice, prior to, and post closing. The purchase agreement contained a clause requiring any problems to be arbitrated. This clause survives the closing. It was also sold "as is" following the multiple inspections.

In the continued vigorous attempts to bring financial harm to me, the buyer brought a lawsuit against only me. Curiously, the buyers attorney was not familiar with arbitration. I explained in my answer to the complaint that the arbitration clause prohibits civil litigation. The judge was in agreement and issued an order referring the case to arbitration within a limited period of time. Time passed and the buyer was unable to produce the initial filing fee. The monies being sought were very close to the amount I received from the sale of the home. The amount of "undislcosed problems" were rather phenomenal, and in my defense, I raised the issue of how these problems were not discovered during the multiple inspections. I also raised the issue of sole liabilty when in fact I was a co-seller/co-owner.

I prepared a motion to have the case dismissed and vacated with prejudice and today my motion was granted. As luck would have it, the judge was quite familiar with my situation. My former husband stood before him the first time he was arrested for assaulting me. Four months later, this same judge bound him over to circuit court for the second assault as it involved four felony counts. At the hearing today I stood alone, without counsel. The opposing party failed to appear. Following his ruling, this judge discreetly advized me to proceed with extreme caution from this day forward. I was advized not to "travel alone".

Further input would be greatly appreciated!

Not only do I agree with the judge....but I suspect that it would be in your best interest to move far away.