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Articles Posted in Alimony

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Alimony and Marital Misconduct

 Horner v. Horner, No. COA19-632 (unpublished)   An alimony claim in North Carolina requires one spouse to be a dependent spouse and the other spouse to be a supporting spouse. A dependent spouse, as defined by statute, is a spouse who is “actually substantially dependent upon the other spouse for…

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Court’s Costly Confusion Over Profits and Expenses

Devine v. Devine, (No. COA19-913) (unpublished) Here in Greensboro, business owners are not immune to unhappy marriages. Divorces can be long and complicated messes, especially when the fortunes of the family rest upon the fortunes of the business. Child support and alimony are based partly on the income and expenses…

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Unpredictable Bonuses and Alimony

Finn v. Finn, COA 19-520 (Unpublished opinion) Alimony can be a complex element in divorce. How much is fair and reasonable, how it is categorized for tax purposes, or even whether it is owed at all are matters often left to the discretion of judges. Here in the Piedmont area…

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Alimony Tax and Good Faith

Faust v. Comm’r, T.C. Memo. 2019 105, 2019 WL 3938725 (2019) (a) Facts: Husband and wife were divorced in Virginia. The wife was a victim of spousal abuse during the marriage. She was Hispanic; English was not her first language. A divorce settlement agreement, incorporated into the divorce decree, required…

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“Not for Profit” … Part 1

Barry v. Comm’r, T.C. Memo. 2017-237, 2017 WL 5899406 (2017)   (a) Facts: When the parties were divorced, the husband agreed to pay the wife $2,400 per month in alimony.  Twenty-four years later, the husband filed an action against the wife in federal court for breach of contract, arguing that…

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“Paid in Full” isn’t always a good thing…Be careful of fine print.

Logue v. Comm’r, T.C. Memo. 2017‑234, 2017 WL 5713945 (2017)   (a) Facts: The parties entered into a premarital agreement.  The agreement provided, among other things, that the wife would receive, upon divorce, a lump sum of $100,000, plus $10,000 for each year the parties were married. The parties married…

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“Til’ Debt Do Us Part”…Bankruptcy and Alimony Settlements

Davidson v. Comm’r, T.C. Memo. 2018-38, 2018 WL 1611811 (2018)   (a) Facts: The parties were divorced by an Arkansas court, and the divorce decree divided the parties’ debt.  Within a few days after the decree was entered the judge sent the parties a letter, which stated: When I made…

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Goodbye Alimony? Not so fast!

by Carolyn Woodruff, attorney, CPA

As has been widely reported, Congress has repealed I.R.C. §§ 71 and 215, thereby eliminating the federal tax reduction for alimony.  In addition, Congress has repealed former I.R.C. § 61(a)(8), which expressly defined alimony as taxable income. In tax years governed by the new law, alimony will be taxable income…

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New Federal Law for Spousal Support Tax Deduction May Impact North Carolina Alimony Negotiations

Alimony is also known as spousal support and it refers to payments made by one spouse to support the other after separation or divorce. The payments may be lump sum payments or ongoing payments. Generally, post-separation alimony lasts until the divorce is concluded. However, a court may also award alimony…

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