Have a Tax Question? Ask a Tax Expert
Hi and welcome to Just Answer!Alimony paid to you is your taxable income - there is no way to have an alimony nontaxable.I am not sure why your attorney says yes - but here is a reference to the statute - http://www.law.cornell.edu/uscode/text/26/71
Gross income includes amounts received as alimony or separate maintenance payments.
So I assume - if you provide that section to your attorney - he/she might say differently...However - for payments - to be treated as alimony - please see IRS pub 504 - www.irs.gov/pub/irs-pdf/p504.pdf Alimony Requirements. A payment to or for a spouse under a divorce or separation instrument is alimony if the spouses do not file a joint return with each other and all the following requirements are met.-- The payment is in cash.-- The instrument does not designate the payment as not alimony.-- 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.-- There is no liability to make any payment (in cash or property) after the death of the recipient spouse.-- The payment is not treated as child support.
For your payments - you need to verify if all these requirements are met and are reflected in your divorce settlement. The fact of payments are called alimony in the divorce agreement would not enough to determine if the payment may be treated as alimony for tax purposes.
Most often - the IRS rejects alimony treatment because divorce agreement has no the clause about "no liability to make any payment after the death of the recipient spouse.
So if your intention is to make payments as not taxable - they should be classified as property settlement and not as alimony - but that is mainly based on your specific circumstances and should be discussed with your attorney.
Let me know if you need any help.