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Posted by Bill Brown on October 16, 2007, 1:19 am
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> I was a widower with twin sons age 2 when I remarried in
> 2003. My second wife was divorced with a son age 4. In May
> of 2007, I was promoted and transferred from Indianapolis to
> Atlanta. She refused to relocate and we legally separated.
> The property settlement has me paying $500 per month against
> the home equity loan on an addition made to her house to
> accommodate me and my sons and it gives me a 30% lien on the
> house less the balance of the addition. I pay directly to
> the bank.
>
> I have my sons. She has her son. We had no children
> together. I say we can both file as unmarried heads of
> household. I also say I can deduct the interest on the home
> equity loan payments. The first two tax pros I interviewed
> say we'll both get audited if we do that and that the loan
> payments should be classified as non-dedcutible alimony.
>
> Am I out to lunch or are they?
Them, at least mostly.
Based on the facts you presented both you and and your wife
qualify for head of household filing status.
It is less clear whether your house payments should be
characterized as alimony. However, if the payments are
alimony then they are deductible by you and reportable by
your wife as income. As far as I know, there is no such
thing as "non-deductible alimony."
Regards,
Bill
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