Family Support in lieu of child support and Maintenance

[Jesse]

It's late and I'm tired - haven't had a chance to look up any info but thought maybe someone out there has come across this situation?

Divorce decree reads:

"Family Support in lieu of child support and maintenance. The respondent shall pay the amount of $1000.00 per month toward family support of the petitioner and the minor children. The family support payments shall commence on April 15, 2005 and shall terminate on March 31, 2009. At such time as the family support payments are terminated, the court shall make a determination of the award of child support."

My client is the petitioner. Her CPA says the respondent can deduct this as alimony and wants to make sure my client claims as alimony. What is it? Alimony doesn't sound right.

[Unregistered]

Like most tax questions - the answer is "it depends". The answer may lie in state law.

You can find some good discussions on the Tax Court website. Go to www.ustaxcourt.gov and do a search for family support. There is no "one size fits all" answer to your question.

[Gene V]

support

This is from a web site while doing a goggle search.

What are the tax consequences of child support, maintenance and family support?

Child support is money paid by one parent to the other parent to be used for the support and care of the children. The payor parent may not deduct child support. It is not considered income to the receiving parent. Maintenance is money paid by one former spouse to the other to assist in the support of the recipient spouse. A payor spouse may deduct the maintenance payments for income tax purposes. The recipient spouse must include maintenance payments in his or her gross income. Finally, family support is essentially what the term denotes: support for the family. Think of it as a combination of child support and maintenance. The payor spouse may fully deduct the family support payments and the recipient spouse must include the payment in his or her gross income. It may be beneficial in some instances for the parties to agree to family support in lieu of child support and maintenance given the tax consequences of the payments.

[Unregistered]

Well, its comforting to know that google solved the problem. Unfortunately (as an example) no one told Judge Marvel that in TC Memo 1999-273. She ruled family support was not deductible to the payor nor taxable to the recipient.

[Jesse]

Well, I appreciate the opions!

And I think that is what Gene offered, an opinion, not a solution to my problem.