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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22704
Experience:  Taxes, Immigration, Labor Relations
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My ex put in divorce papers that he will pay me $1320 for maintenance.

Customer Question

My ex put in divorce papers that he will pay me $1320 for maintenance. As of now, I do NOT see a penny of it instead he sends it to our Mortgage company to pay the house with.  If he was to give the cash over to me, I would be also using it to pay the house myself.  We both still are on mortgage as owners of the house.  My question is, since the $1320 is supposed to be paid to me  as maintenance and I don't get the cash directly, shouldn't I be able to claim the interest and the taxes paid for house on MY taxes each year? Or should we be splitting the amount paid for them on both of our taxes.  I feel I am being cheated as I have to pay taxes on the $1320 and he gets to claim it and the interest/taxes on house.
Submitted: 3 years ago.
Category: Tax
Expert:  Lev replied 3 years ago.

LEV :

Hi and welcome to Just Answer!

LEV :

Alimony is a payment to or for a spouse or former spouse under a divorce or separation instrument. It does not include voluntary payments that are not made under a divorce or separation instrument.

LEV :

My understanding that your ex-spouse's payments to the mortgage company ARE NOT made under your divorce decree.

LEV :

As such - these payments are not calssified as alimony - these payments are not taxable for you and are not deductible for the payer.

Customer :

It says nothing on the actual decree of dissolution of marriage that the $1320 will pay the house payment

Customer :

When I had my taxes done at an H&R Block last year I was told since the divorce papers said that he would be pay

Customer :

paying me that amount as maintenance even though I do not see the money that I have to pay taxes on it

LEV :

Moreover - according to the IRS - alimony does not include payments to keep up the payer's property.

LEV :

That is exactly what I said - (1) Alimony is a payment made under a divorce decree (2) Your divorce decree directed that payments are made to you (3) Payments are not made to you but instead are paid for the property the payer owns


(4) So payments should not be classified as alimony: your ex-spouse should not deduct these payments on his tax return and you do not need to include them into your taxable income.

LEV :

Please see for reference IRS publication 504 - www.irs.gov/pub/irs-pdf/p504.pdf page 12.

Customer :

Question here, in the Separation Agreement, there is a place where he put other that he will make mortgage/tax/insurance payments on home and I and the kids will live in the house rent free, does that make a difference

LEV :

Yes - that makes difference - that means payments are made under the divorce decree.

LEV :

But I am not clear how that is connected to maintenance payments?

Customer :

it says that we agree the house payment will serve as alimonoy to me

Customer :

so basically i scewed myself agreeing to this

LEV :

So your divorce decree allows making house payments INSTEAD of alimony or in ADDITIONAL to alimony?

Customer :

no that is my alimony, the housepayment till aug. 2013

LEV :

INSTEAD of alimony?

Customer :

well, separation agreement says that "Maintenance will be paid by him in the form of monthly mortgage on the houe

LEV :

I am asking because originally you wrote - "My ex put in divorce papers that he will pay me $1320 for maintenance. I do NOT see a penny of it..."

LEV :

Ok - that is a different situation...

Customer :

i just found the papers from the separation agreement

Customer :

in the divorce decree the judge signed it only says he will pay me $1320 in maintenance

LEV :

So we need to based our conclusion on the latest.

Customer :

i think so

LEV :

Please see teh publication I references above page 13...

LEV :

Example. Under your written separation agreement, your spouse lives rent-free in a home you own and you must pay the mortgage, real estate taxes, insurance, repairs, and utilities for the home. Because you own the home and the debts are yours, your payments for the mortgage, real estate taxes, insurance, and repairs are not alimony. Neither is the value of your spouse's use of the home.

LEV :

So because you ex owns the property - these payments are not alimony and are not taxable for you.

Customer :

I am confused

Customer :

both of us are still joint owners on the house

LEV :

What is important - that he is an owner.

Customer :

i still don't understand if we are both on the mortgage how he is the owner

LEV :

He is a joint owner - still an owner - he owns partial interest in that property.

Customer :

when we sell the house, which we both agreed will happen, we split the profett

Customer :

true, so am i so i am confused cause he gets to claim the interest and tax

LEV :

Because he is co-owner - the debts are partialy his - and payments may not be treated as alimony - according to the IRS.

Customer :

okay, so in other words he can't claim the alimony on his taxes and i should not have to pay but the man at the H&r block said i had to claim it as income

LEV :

That is exactly what I am trying to tell. Please read that publication and you will get a better understanding.

Customer :

and pay taxes on it

LEV :

I suggest to take all these infromation and go back to your tax preparer.

LEV :

As long - are we clear on the alimony issue?

Customer :

i am still confused about this

LEV :

I want you to be clear before moving to interest deduction issue...

Customer :

should i be reading on page 24 under alimony /community income

LEV :

pages 12-17

Customer :

so his paying the house payment falls under community income?

LEV :

I will be back tomorrow and we will discuss interest deduction issue.

LEV :

You are not living in community property state - that part doesn't relate to you.

LEV :

see pages 12-17

Customer :

okay, i saw that colorado isn't one

Customer :

i will read all the info

Customer :

i am just confused

LEV :

take your time. your situation is not as bad as you think.

Customer :

i just feel he took advantage of me and i should have gotten a lawyer but he asked if we could do it without one but i think he was getting legal advice from one without me knowing

Customer :

i just know having to claim this alimony is causing me to have to pay taxes and i don't have the money to be paying taxes

Customer :

i pay more monthly for utilities, upkeep than he does mortgage pymnts

Customer :

so what i get is he can't claim the alimony since it pays the mortgage on what he is a owner of

Customer :

thank you for the link to this info, will chat about interest deduction later

LEV :

Hi,


I assume that we are clear - payments that you should receive under your divorce decree, but you did not receive – instead your ex-spouse made mortgage payments for the property that you both jointly own - should not be classified as alimony.


Moreover - if your ex-spouse deducts these payments on his tax return - the IRS will expect you to report them as taxable income and if you would not - you will need to inform the IRS that payments were not made to you but these were payments for the property that you both owns and as such should not be treated as an alimony. You might want to discuss that with your tax preparer and inform your ex-spouse - so he would not deduct that payment and avoid problems with the IRS.


 


Another problem with deduction of mortgage interest that I specifically did not discuss to avoid confusion until we are clear with the alimony issue.


Please see in the same publication page 13 - Table 4.Expenses for a Jointly-Owned Home


If your ex-spouse pays mortgage interest (principal and interest) AND THESE PAYMENTS WERE DIRECTED BY THE DIVORCE DECREE - THEN he can deduct and you must include as alimony half of the total payments, and


each of you may claim half of the interest as interest expense payments (if the home is a qualified home)


Please be aware that the above would be in effect only if your divorce decree directed your ex-spouse make these payments.

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