Alimony or Community Income or Property Settlement

[erchess]

OK - I am looking for a way not to call certain payments alimony. The divorce was done between the parties with one lawyer who was and always had been "his lawyer" and my client had no lawyer. The agreement specifies that he got the house and his business which was small when they married had grown to be a good size by the time of their divorce 25 years later. All she gets is "alimony" for five years. But it seems clear to me that the "alimony" is really a split of income and a property settlement. What gives me hope is the statement in the chart on TTB 1040 Edition pg 12-12 that if the payment is really a distribution of community income then it's not alimony. On the other hand I don't know what community income is in this context but these events took place in NC which is not a community property state.

So does anyone have anything to say about whether I must report the so called Alimony as such or whether there is a case to be made for treating it as nontaxable?

[JON]

I think it is tough

for you to change the terms of a divorce agreement. Do you have all the facts as to what liabilites were split and how? However, if your client did not sign off on a statement from the attorney who handled it - that he was not independent I think a telephone call to him saying here is how you think it should be handled on her return and you want confirmation from him that is OK. If no, then as a good professional you are going to advise your client to get an attorney, because she was not represented in the divorce (tell that to the attorney). I do not know what State you are in, but most Bar Associations say in a divorce you never represent both parties.

Make sure you know the EX got away with something.