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Tax question - divorce related

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satyadwivedi

Junior Member
What is the name of your state? VA

Hi,

I need some advise for Tax preparation.

I am getting divorce in next few month. Me and my wife are both citizen of India and our divorce case is filed in India. As per our agreement I will be paying one time alimony to her. This will be a fixed amount paid at once at time of divorce case settlement. This amount will be paid in India only. We don't have a property settlement as there is no joint property between us.

I live in USA and will be filing my tax in USA only. My question is can I file amount paid as tax deductible. I know alimony paid to your spouse is tax deductible as per US tax law. I need to know if same rule applies for one time alimony paid. Also do I need to specify any text in my divorce documents for this.

Quick response is very much appreciated as we are in preparation of divorce agreement documents.What is the name of your state?
 


abezon

Senior Member
A one-time alimony payment is a property settlement & is not deductible as alimony. Alimony must continue for 3 years or it is subject to being redesignated as a property settlement.

Before you change the settlement terms, you'll need to check the India-US tax treaty to see how alimony is handled. You may not be able to deduct any alimony paid to an Indian citizen who does not have a US green card. (A person with a green card has to file a US return no matter where they live.) Alternatively, you may need to withhold 30% nonresident tax & require her to file an annual return for a refund.
 
Last edited:

mjcrules

Member
What is the name of your state? VA

Hi,

I need some advise for Tax preparation.

I am getting divorce in next few month. Me and my wife are both citizen of India and our divorce case is filed in India. As per our agreement I will be paying one time alimony to her. This will be a fixed amount paid at once at time of divorce case settlement. This amount will be paid in India only. We don't have a property settlement as there is no joint property between us.

I live in USA and will be filing my tax in USA only. My question is can I file amount paid as tax deductible. I know alimony paid to your spouse is tax deductible as per US tax law. I need to know if same rule applies for one time alimony paid. Also do I need to specify any text in my divorce documents for this.

Quick response is very much appreciated as we are in preparation of divorce agreement documents.What is the name of your state?
Two problems:

1. Payment of monies required by foreign country judicial system (foreign currency as well?) don't appear to be related to your status as a U.S. resident (assuming you are)..
Alimony only deductible if Court ordered and if recipient must include in their income. Doesn't sound like the Ex is living, working and a U.S. resident.

2. The payment you were ordered to make looks to be a property, equitable distribution settlement vs. alimony (imo).

To take the deduction for alimony for U.S. Fed Income tax purposes you need to identify the recipient along with their SSN. Can't tell from the OP if this is possible.

Without all the facts inferred above, can not make a valid responses except to say it appears doubtful at best and an extremely aggressive position if you take the deduction.
 

abezon

Senior Member
Also check the treaty about claiming a personal exemption amount for your wife if the divorce is not final by 12/31/2007.
 

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