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Alimony - Lump Sum

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    Alimony - Lump Sum

    While I research this in the matter of expedience I wanted to post this.

    Client Paid $60,000 lump sum in Alimony to the 'ex'.
    I understand this "can be" a deductin for him, but the question remains --

    Can some please help me interpret this wording on his Divorce Decree?
    The way I read it doesn't fare well for my client.
    In his words -
    The ideal scenario is he gets the alimony deduction, she has to claim it. I guess this wasn't a happy divorce!
    2nd best scenario is he gets to deduct it and she gets a pass.
    Worst case is - he got burned one more time....

    This is a cut/paste from his decree:

    Alimony: Both parties hereby waive, now and forever, any and all
    claims for alimony, maintenance or any other form of spousal support. The
    Husband's waiver of alimony shall be co-extensive with the Wife's waiver of
    alimony as otherwise set forth herein, and which is being made in exchange for
    receiving an additional $60,000 from Husband's share of the net proceeds from the
    sale of the marital residence. The parties have, with full knowledge of their present
    circumstances and with consideration of all future circumstances, bargained for the
    alimony waiver provision herein, which was an essential element of this agreement,
    and acknowledge that they are bound by this agreement and by the transaction
    set forth herein. The parties further acknowledge that this provision contemplated
    existing case law and any foreseeable modifications in that case law or changes
    in their circumstances. This alimony waiver shall be non-modifiable and
    irrevocable and beyond the jurisdiction of any Court to change even if any or all of......


    Thanks in advance for any help you can offer.
    Last edited by MAJ; 03-15-2009, 11:14 AM. Reason: Include Divorce decree
    Matthew Jones
    Tax Preparation
    Computer Consultant


    Tax Season is here!
    Make sure everything is working, extra ink or toner is available, Advil in top drawer!


    #2
    The $60,000 sounds like an additional amount of property settlement (your worst case). See page 12-11 "Property Settlements and Transfers".

    Comment


      #3
      Agree with David, sounds like he indeed waived alimony and $60,000 from sale of marital residence is property settlement. But I've been wrong before!
      http://www.viagrabelgiquefr.com/

      Comment


        #4
        Not sure this will help. Here's a link to info from the IRS.
        You have the right to remain silent. Anything you say will be misquoted, then used against you.

        Comment


          #5
          I agree with others. Wording clearly says it is not alimony and it should be treated as a property settlement only. No realized gain/loss for either. There is no way he can deduct and she gets a pass. It either is or it isn't. At one time, alimony had to be periodic.

          Comment


            #6
            Who was his attorney?

            I wonder if his attorney even tried to explain this part of the agreement to him!

            I had a client I asked who his attorney was, he said he went with the wife's attorney. I told him he did not have an attorney.

            Comment

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