(a) Facts: The parties were divorced in Illinois. The wife remained in the former marital home, and the husband was ordered to pay the mortgage. Upon an eventual sale of the home, the parties were to split the net proceeds. Continue reading →
As has been widely reported, Congress has repealed I.R.C. §§ 71 and 215, thereby eliminating the federal tax reduction for alimony. In addition, Congress has repealed former I.R.C. § 61(a)(8), which expressly defined alimony as taxable income. Continue reading →
My ex and I share the children fifty-fifty. We have three children. I make approximately $25,000 more than the other parent. I pay child support even though I have them half the time. Our child support order says nothing about who gets the dependency exemptions, and I get in a fight with my ex every year over the dependency exemptions. Who should get the three dependency exemptions?
Forget it!
Forget about the alimony deduction for all new decrees or instruments post-2019. (See Part I for modification of pre-2019 alimony orders and agreement, as modification has a separate set of rules.) The deduction is gone absent a congressional miracle. That means on December 31, 2018, or before you must have alimony that qualifies under IRC Section 71 before it is repealed. The alimony must meet the terms of Section 71, pre-TCJA and pre-2019, which are as follows: Continue reading →
Previously, we examined the paragraph and subparagraphs defining “divorce or separation instruments.” Now let’s take a look at which sections of TCJA incorporate these subparagraphs.
The repeal of the alimony tax sections for the inclusion of income and deduction has an ancillary impact on other divorce tax issues. The effective date for all ancillary issues discussed in this article is December 31, 2018, the same as the alimony repeal. These December 31, 2018, changes shall be referred to herein as “post-2018” changes. Continue reading →
Divorce was hard enough, and now alimony tax reform. Do you feel good or bad about alimony? No matter your answer, this alimony tax reform revolutionizes the divorce arena, and you need to know how it may affect you and your clients. Judges need to know how it might affect those whose appear before them as litigants. So let’s dig in. Continue reading →
Facts: A husband and wife filed joint returns. The returns were prepared by the wife. The returns understated the amount of tax due, mostly because they wrongly double-counted certain gambling losses incurred by the husband.
The IRS assessed a deficiency. The wife filed a petition for innocent spouse relief, the IRS denied it, and the wife appealed to the Tax Court. Continue reading →
Dear Carolyn,
I think my husband and I may be getting separated and divorced, and I am concerned about our 2016 tax return, which has not been filed yet. The tax return is under an extension. My husband has a small business in Greensboro, and I have no idea if he reports all of the income in the business. I have heard that I can be responsible if I sign the return. He never gives me a copy. Do you have any thoughts on this issue? Do I have to worry?
~ Worried and in the Dark Continue reading →
Stapleton v. Comm’r, T.C. Memo. 2015-171, 2015 WL 5049758
Facts: A father and mother had two children. The parents were never married. No court was ever asked to decide custody, but the parents agreed that the father would have the children every Monday and Wednesday night and every other weekend. In 2011, the father had custody of the children for 176 days. Continue reading →
North Carolina Divorce Lawyers Blog