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Posted by Herb Smith on July 4, 2007, 10:57 pm
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>> Clients divorced in 2007. The divorce decree states the male
>> (who I expect will continue to be our client) must make
>> payments on the house but it is in the x-wife's name and she
>> lives there, not him.
>> Is there anyway I havn't thought of to claim the tax and
>> interest on his Sch A?
> Does the husband make the payments directly, or give the ex
> the money and she makes the payments?
>
> If the latter, you might be able to make a case for this
> being alimony or spousal support - deductible as an "above
> the line" deduction on his 1040 form. Concurrently, the
> ex-wife would have to claim this alimony as taxable income,
> but could deduct the interest and property taxes on her
> 1040/Schedule A.
>
> For him to be able to deduct these items on his Schedule A,
> he must have an ownership interest (taxes) or be liable for
> the mortgage debt.
>
> Moderator:
> Sticking ny neck out without reading the code: I would
> argue that the direct payments to the mortgage lender are
> for the economic benefit of the ex-spouse and as such are
> alimony unless the divorce decree or the code say
> different.
Dick - No argument there, according to this statement in Pub
17:
"Cash payments, checks, or money orders, to a third party on
behalf of your spouse under the terms of your divorce or
separation instrument can be alimony, if they otherwise
qualify. These include payments for your spouse's medical
expenses, housing costs (rent, utilities, etc.), taxes,
tuition, etc. The payments are treated as received by your
spouse and then paid to the third party. "
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