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? mike
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It doesn't sound like a property division, so it must be spousal support, and he can deduct it on that basis. Take a look at the court order to see what it says. I'd have to check the relevant statutes and regulations, but I don't think there's another way he can get the deduction. Stu
Under certain conditions, it can be considered alimony.
"Mike" wrote
Is it alimony?
-- Paul A. Thomas, CPA Athens, Georgia
"Mike" wrote
It's been close to 30 years since my divorce. Then court-ordered payments in addition to child support were deductible as alimony. That included mortgage payments and and a family health care policy (not from an employer) for ex-spouse and children.
There was also a payment method called 'Unallocated Maintenance" which included both alimony and child support and was taxable to the recipient.
My first wife took everything including my hearing - only to learn that she had to pay taxes on it.
Dick
None that I can think of, assuming he gets no ownership interest in the house.
Have you taken a look at the alimony angle? I haven't looked at this in years, but there's something rattling around in my head about a series of payments being treated as alimony regardless of what the decree might call it.
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.
I assume he is liable for the mortgage debt, but I still don't see a Schedule A deduction. That's available only for home mortgage interest (it's no longer his primary or second home) or investment interest (he has no ownership interest).
-- Phil Marti Clarksburg, MD
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. "
He makes the payments directly. BTW, one important piece of info I left out......we're in TX and have no alimony here. mike
Moderator: Since Texas has no State income tax (yet!), there is no Teaxas issue here. The IRC determines what is alimony for federal tax purposes.
If it's not alimony, what is it?
Family support works, but child support does not. It sure doesn't sound like a property division, though I suppose it could be depending on the circumstances. Stu
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