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Do you usually claim a tax deduction for a lump sum alimony?

Atlanta, GA |
Filed under: Divorce Alimony

I am paying my husband $5000 as a divorce settlement agreement. As it is a lump sum as opposed to monthly payments, I'm not sure if it counts as alimony or not.

If it does count as alimony, should I say that I will claim a tax deduction for this? The Georgia divorce form asks this question and I am not sure whether I should be saying I will/ will not be claiming a tax deduction on this 'alimony'.

Please advise. Thanks.

Attorney Answers 4

Posted

This sounds more like a property disposition pursuant to a divorce decree than it does alimony. Alimony is usually paid in monthly installments. So unless this is some private agreement that satisfies a court mandated alimony payment that was supposed to be paid monthly, then it will not be alimony. It sounds like the court split the assets and you were left giving him 5k. If that is the case, this is a non-taxable event for both parties as it counts as a transfer of property between spouses. You cannot deduct it, and it is not income.

Christopher Larson
Insight Law

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Posted

It does not sound like alimony- its sounds like a property settlement.

You need a lawyer. Even a bad lawyer will do better for you than what you are doing for yourself. Shop wisely, and you'll come out even better.

Good luck.

Thanks for reading my response to this question. If your found this answer "Helpful" or "The Best Answer" PLEASE MARK IT, because Avvo awards me points. Thank you! Note that the questioner and any reader do not have an attorney-client relationship formed by our communications on this website. Advice given by me on this website is general advice based on partial information. You should not rely on any advice given without first hiring a lawyer in the area where the case is pending, and providing that lawyer with full information.

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Posted

Whether a payment between divorcing spouses counts as alimony depends not on how it is being paid but rather why.

How it is handled for the purposes of taxation is a separate question; and one that should be posed to a tax attorney. You should not say that you will claim it as a tax deduction unless and until you can do so. This means first determining what your payment is (discussion with a Family Law attorney), then determining if it is deductible (discussion with a Tax attorney or CPA or other tax PROFESSIONAL - ie, not just your local tax preparation office).

YOU NEED AN ATTORNEY! Cleaning up all of the things that are likely to go wrong in your divorce may be impossible and/or expensive. It would behoove you to sit down with an attorney now to help you avoid a disaster later.

I hope this information helps answer your question(s).

~ Kem Eyo

The above answer is a general explanation of legal rights and procedures. It does not constitute legal advice. Nor does it establish an attorney-client relationship between the individual posting the question and the attorney providing the answer.

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Posted

I agree with all the comments made by the preceding lawyers. I would like to add that lump sum payments of alimony has long been a problem from the standpoint of the internal revenue code. Calling a payment "alimony" does not make it deductible alimony. You should only claim a deduction for it after consulting a tax attorney or CPA familiar with the definition of alimony under the Internal Revenue Code. She or he will need to see your settlement agreement. Good luck !

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