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…
Leslie v. Comm’r, 725 F. App’x 597 (9th Cir. 2018) (unpublished) (a) Facts: A husband and wife signed a separation agreement to settle a California divorce case. In a section entitled “Spousal Support,” the agreement awarded the wife $7,000 per month, stating expressly that it would end upon either party’s…
Hexum v. Comm’r, 721 F. App’x 512 (7th Cir. 2018) (unpublished) (a) Facts: The parties were divorced in Illinois. The wife remained in the former marital home, and the husband was ordered to pay the mortgage. Upon an eventual sale of the home, the parties were to split the net…
As has been widely reported, Congress has repealed I.R.C. §§ 71 and 215, thereby eliminating the federal tax reduction for alimony. In addition, Congress has repealed former I.R.C. § 61(a)(8), which expressly defined alimony as taxable income.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…
Forget it! Forget about the alimony deduction for all new decrees or instruments post-2019. (See Part I for modification of pre-2019 alimony orders and agreement, as modification has a separate set of rules.) The deduction is gone absent a congressional miracle. That means on December 31, 2018, or before you…
Previously, we examined the paragraph and subparagraphs defining “divorce or separation instruments.” Now let’s take a look at which sections of TCJA incorporate these subparagraphs. Sections incorporating all three subparagraphs of the definition of divorce or separation instrument Post-2018. The two sections of TCJA that adopt all three subparagraphs of…
The repeal of the alimony tax sections for the inclusion of income and deduction has an ancillary impact on other divorce tax issues. The effective date for all ancillary issues discussed in this article is December 31, 2018, the same as the alimony repeal. These December 31, 2018, changes shall…
Divorce was hard enough, and now alimony tax reform. Do you feel good or bad about alimony? No matter your answer, this alimony tax reform revolutionizes the divorce arena, and you need to know how it may affect you and your clients. Judges need to know how it might affect…
Anderson v. Comm’r, T.C. Memo. 2016-47, 2016 WL 976816 (2016) Facts: An Alabama court entered a pretrial order in a divorce case, requiring both parties to “[m]aintain status quo as to payment of house note or rent, utilities, food, necessities, fixed credit obligations, ” 2016 WL 976816, at *1. After…
Wolens v. United States, 125 Fed. Cl. 422 (2016) Facts: The parties married in New York, but divorced in England. Their English divorce decree provided for a large initial payment to be made by the husband to the wife, followed by annual payments of £441,667 in 2007, 2008, and 2009.…