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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29918
Experience:  Taxes, Immigration, Labor Relations
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I pay my x wife $4800.00 in Spousal support. Now I have to

Customer Question

I pay my x wife $4800.00 in Spousal support. Now I have to pay her $20,000.00 to settle our divorce agreement. Is the $20,000.00 tax deductible.
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

Property settlement is NOT deductible...

Expert:  Lev replied 1 year ago.

ONLY alimony payments are deductible for the payer and taxable for the recipient.

.However - for payments - to be treated as alimony - please see IRS pub 504 - page 15 -

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..

So - if all these requirements are satisfied - payments are deductible for the payer, but must be reported as taxable for the recipient.

Same requirements are for federal and state income tax purposes.

Expert:  Lev replied 1 year ago.

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