Alimony

[Nick0924]

What is the name of your state? Tennessee

I divorced back in July. Among other things, I was to pay all my spouse's medical bills, make the mortgage payments on our jointly-owned home for the two months I didn't live in it, and had to bring nearly $14,000 to closing to sell the home. My spouse was required to bring nothing. My CPA says that per publication 504 of the IRS regulations, that I can count 50% of the mortgage payments, the amount I brought to closing, and the medical expenses as alimony paid to my spouse throught a third party.

Is this correct, can I count this as alimony?

Thanks,
Nick

[tuffbrk]

Might be better to post in the Tax Law forum

[LdiJ]

Originally Posted by Nick0924

What is the name of your state? Tennessee

I divorced back in July. Among other things, I was to pay all my spouse's medical bills, make the mortgage payments on our jointly-owned home for the two months I didn't live in it, and had to bring nearly $14,000 to closing to sell the home. My spouse was required to bring nothing. My CPA says that per publication 504 of the IRS regulations, that I can count 50% of the mortgage payments, the amount I brought to closing, and the medical expenses as alimony paid to my spouse throught a third party.

Is this correct, can I count this as alimony?

Thanks,
Nick

Absolutely not. It wasn't alimony, it was a property settlement and the tax code strictly prohibits treating property settlements as alimony. Find yourself another CPA. To keep using one that got something so "basic" wrong is a recipe for an audit....with possible fraud penalties.

Alimony/spousal support must be periodic in payment, and must specifically be stated as alimony or spousal support in your divorce decree or separation decree, in order to be deductible. Now, if the judge ordered you to pay the mortgage payments and her medical bills in lieu of alimony, and it was in a written order that said so, THAT might count, but the money you took to closing absolutely DOES NOT. That absolutely was part of your property settlement.

[mistoffolees]

Originally Posted by LdiJ

Absolutely not. It wasn't alimony, it was a property settlement and the tax code strictly prohibits treating property settlements as alimony. Find yourself another CPA. To keep using one that got something so "basic" wrong is a recipe for an audit....with possible fraud penalties.

Alimony/spousal support must be periodic in payment, and must specifically be stated as alimony or spousal support in your divorce decree or separation decree, in order to be deductible. Now, if the judge ordered you to pay the mortgage payments and her medical bills in lieu of alimony, and it was in a written order that said so, THAT might count, but the money you took to closing absolutely DOES NOT. That absolutely was part of your property settlement.

I agree 100%. To me, the money brought to closing was clearly property settlement and not alimony. The IRS rules are very clear on this.