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Posted by Mark Bole on July 3, 2008, 10:06 am
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Arthur Kamlet wrote:
[...]
> One other item is that if he is required to pay her alimony,
> sometimes called spousal support, and they are now living
> together, whether or not for fun and profit, the alimony is
> neither deductible by him nor taxable to her.
Pub 504 is clear as mud on this, especially since the term "spouse" is
also used to mean "former spouse" unless otherwise stated. If the
divorce is final, can't they still live in the same household and
claim/deduct alimony?
"Exception.
If you are not legally separated under a decree of divorce or separate
maintenance, a payment under a written separation agreement, support
decree, or other court order may qualify as alimony even if you are
members of the same household when the payment is made."
-Mark Bole
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Posted by Bill Brown on July 3, 2008, 10:59 am
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>
> Pub 504 is clear as mud on this, especially since the term "spouse" is
> also used to mean "former spouse" unless otherwise stated. If the
> divorce is final, can't they still live in the same household and
> claim/deduct alimony?
>
No.
> "Exception.
> If you are not legally separated under a decree of divorce or separate
> maintenance, a payment under a written separation agreement, support
> decree, or other court order may qualify as alimony even if you are
> members of the same household when the payment is made."
I don't know what, if anything appears in Pub 504 before or after the
quoted passage but payments by one person to another are not alimony
if they are living in the same household.
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Posted by dpb on July 3, 2008, 2:11 pm
Please log in for more thread options Bill Brown wrote:
...
>> "Exception.
>> If you are not legally separated under a decree of divorce or separate
>> maintenance, a payment under a written separation agreement, support
>> decree, or other court order may qualify as alimony even if you are
>> members of the same household when the payment is made."
>
> I don't know what, if anything appears in Pub 504 before or after the
> quoted passage but payments by one person to another are not alimony
> if they are living in the same household.
This wouldn't be applicable in the case here as the OP stated the
individual is legally divorced so he wouldn't meet the "not" portion of
the initial qualifying phrase.
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<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
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<< Copyright (2007) - All rights reserved. >>
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Posted by Mark Bole on July 3, 2008, 2:15 pm
Please log in for more thread options Bill Brown wrote:
>> "Exception.
>> If you are not legally separated under a decree of divorce or separate
>> maintenance, a payment under a written separation agreement, support
>> decree, or other court order may qualify as alimony even if you are
>> members of the same household when the payment is made."
>
> I don't know what, if anything appears in Pub 504 before or after the
> quoted passage but payments by one person to another are not alimony
> if they are living in the same household.
No, it's not that simple. There's one clear exception, the
"one-month-before-leaving rule". Further, the "living in the same
household" rule *only* applies under a specific condition, that's what
I'm struggling with. I'm not a lawyer but have always understood that
"legally separated" and "divorced" are two distinct statuses, even
though in some areas of the tax code they are treated the same. My
question is, in this area (tax impact of alimony payments), is that also
true? It looks to me from Pub 504 that it is not.
Here is the full context of the "exception" quoted above:
---[quote]---
Spouses cannot be members of the same household.
Payments to your spouse while you are members of the same household are
not alimony if you are legally separated under a decree of divorce or
separate maintenance. A home you formerly shared is considered one
household, even if you physically separate yourselves in the home.
You are not treated as members of the same household if one of you is
preparing to leave the household and does leave no later than one month
after the date of the payment.
Exception: [...]
---[end quote]---
Elsewhere under "Alimony requirements", one of the conditions that must
be met:
"The spouses are not members of the same household at the time the
payments are made. This requirement applies only if the spouses are
legally separated under a decree of divorce or separate maintenance."
Remember that the term "spouse" usually includes "former spouse" under
the language of Pub 504.
To take Dick's original example further, suppose parents whose divorce
was finalized in some prior year, and who have been living apart, now
decide to live together again with their kids and do so for the entire
year. Seems to me the following statements are true in this case:
1) alimony paid is deductible for the payer, taxable income to the
recipient. (they are divorced, not just legally separated, so the
requirement about separate households does not apply).
2) If there is no alimony or it is below the exemption amount
(unlikely), and the support test is met, the ex-spouse with no other
income can be claimed as a dependent by the other parent.
3) The parent with the higher AGI is the custodial parent and can claim
the kids' dependency exemptions and HOH filing status (assuming all
other normal tests are met).
-Mark Bole
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<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
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Posted by Stuart A. Bronstein on July 3, 2008, 4:00 pm
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> No, it's not that simple. There's one clear exception, the
> "one-month-before-leaving rule". Further, the "living in the same
> household" rule *only* applies under a specific condition, that's
> what I'm struggling with. I'm not a lawyer but have always
> understood that "legally separated" and "divorced" are two
> distinct statuses, even though in some areas of the tax code they
> are treated the same. My question is, in this area (tax impact of
> alimony payments), is that also true? It looks to me from Pub 504
> that it is not.
I haven't researched in with respect to this particular situation,
but in general they are treated the same. Legally separated means a
court decree of legal separation that is the functional equivalent of
divorce for people whose religion forbids them to get an actual
divorce. Except with respect to bigamy laws, they are treated as
divorced in just about every other way.
> To take Dick's original example further, suppose parents whose
> divorce was finalized in some prior year, and who have been living
> apart, now decide to live together again with their kids and do so
> for the entire year. Seems to me the following statements are
> true in this case:
>
> 1) alimony paid is deductible for the payer, taxable income to the
> recipient. (they are divorced, not just legally separated, so the
> requirement about separate households does not apply).
Personally I think this comes down to same house vs. same household.
I've known divorced couples who remained roommates. I don't think
they could be said to have been in the same household.
Stu
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<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
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