ALIMONY IS ONLY TAX DEDUCTIBLE IF PAID FOLLOWING A DIVORCE OR TEMPORARY ORDER

Alimony must be paid pursuant to a divorce or separation agreement or temporary order to be deductible. James J. Faylor v Commissioner of Internal Revenue (T.C. Memo. 2013-143, Filed June 5, 2013).

In the Faylor case, Mrs. Faylor filed for temporary support in August 2007. The parties agreed that Mr. Faylor would pay $5,000 a month temporary alimony. However, the temporary order was not entered for quite some time. When Mr. Faylor attempted to deduct all of the alimony, the alimony paid prior to entry of the temporary order was disallowed, because the order had not been formerly signed by the Judge. (Note: child support is not deductible even it is included in a temporary order, however, a dependent exemption may be in issue).

Credit: divorce valuation CPA Jim Koerber of The Koerber Company in Hattiesburg for this information. 888-655-8282.