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ALIMONY OR NOT????

January 31, 2017 • NELSON • Log In to Post Comments

New Client showed his alimomy court order for $1200 per month plus $250 for a car for a balance of $7K(not in question). In addition, he has to pay $550 a month from his military retirement to her in which he gets taxed fully for his yearly fixed pension of $15519 of ten years. This is his first full year to pay alimony. Is it not the $550 is also alimony if he got taxed for ALL retirement income????? This would be an extra $6600 deduction for him.....YES????? How will this be entered in the 1040?

Thank you.


Comments

Nelson,

Regarding the military retirement, as long as your client is required to pay the $550 pursuant to the divorce instrument and the payments stop when the ex-wife dies, then yes, it should be classified as alimony.  However, when it comes to retirement benefits, like the military retirement, it is very possible that it is really a property settlement and not alimony.  You should review the divorce documents very carefully to make a proper determination.

Yes, I did not even read 10% of the court agreement in which he had a paralegal as help. I suggested maybe his retirement can divide and send out separate checks. If it is a property settlement and he passes, she stops getting payments.

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