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Wendy Reed
Wendy Reed, Enrolled Agent
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Experience:  15+ years tax preparation and tax advice.
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WHAT IS ALIMONY IN SOLIDO AND IS IT TAXABLE TO THE RECIPIENT

Resolved Question:

IS ALIMONY IN SOLIDO TAXABLE TO THE RECIPIENT?
Submitted: 8 years ago.
Category: Tax
Expert:  Wendy Reed replied 8 years ago.
Hello in Tennessee.

Alimony in solido means alimony paid in a lump-sum, as opposed to over a length of time.

The wording of your divorce decree should determine whether or not the payment(s) you received are considered alimony.

Alimony is deductible for the payer, and taxable to the recipient. To be alimony, the payments must be required by divorce or separation instrument, parties must not file a joint return if still married, payments must be in cash (including check and money order), spouses are not members of the same household, payments are not required after the death of the spouse, and payment is not treated as child support or designated "not alimony".

If the money you received meets all of those guidelines, then it would be taxable to you. The only exception to this is if you had a written agreement that both spouses signed stating that the payments would NOT be treated as alimony and would be excludable by you.
Customer: replied 8 years ago.
Reply to Wendy Rieger's Post: th divorce decree is as follows: alimony in solido: husband shall pay wife as alimony in solido the sum of $$in installments as follows:$$certain amount per mnt for 42 mths, due last day of each month totaling 42 payments in this $$amount
--$ x amount for the next 30 months in this amount totaling $$x amount--$$x amount for the next 40 months until completing 41 payments.
***"the amounts to be paid herein as alimony in solido are absolutely conditioned upon no child support ever being due to the wife from the husband;upone wife accepting the parenting plan....." my lawyer had told me this alimony in solido is in leiu of child support--am i correct in thinking that it is not taxable to me because it is in leiu of child support???? or should i call my lawyer?? thanks for your help..
Expert:  Wendy Reed replied 8 years ago.
Hi again. Unfortunately, divorce decrees are notorious for using language that is not amenable to intrerpretation under the tax code. Your alimony seems to meet all of the requirements of taxable alimony, including the fact that it is NOT treated as child support. If the decree specifically states that no child support is ever due, then it would appear that the payments are NOT child support.

If the divorce decree does not state whether the payments are or are not child support, the main factor to determine this would be if there is a contingency related to the child (children), such as "the payments will stop or be reduced upon the child's employment, death, leaving the house, marrying, etc." There is no such contingency here.

I fear that your ex husband knew this, and his attorney constructed the wording of your divorce specifically so your ex would be able to deduct his payments. (which he could not do if they were considered child support). Your attorney should have discussed this wording and the tax implications with you before you signed the agreement.

I would definitely give him a call and ask him for his postition on the issue of taxability. He will probably tell you to consult a tax advisor.

My expert opinion is that these payments are specifically considered NOT child support, and as such are taxable. My opinion is also that you got an unfair deal and not the best attention from your attorney.

If you would like additional information about alimony, taxability, etc. Here is a link to the irs web site, and the relevant publications that you can view about this issue online: http://www.irs.gov/taxtopics/tc406.html
Good luck with everything!
Wendy Reed, Enrolled Agent
Category: Tax
Satisfied Customers: 3345
Experience: 15+ years tax preparation and tax advice.
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