New Alimony Rules

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Message Board New Alimony Rules

This topic contains 2 replies, has 3 voices, and was last updated by Sandy Weiner 1 week, 3 days ago.

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  • #158232
    Anonymous

    Hello,

    My client is in the process of getting divorced. The divorce will be finalized and divorce decree will be signed later this year in 2019.

    The client and ex-spouse signed spousal support stipulation agreement on 12/31/18 but it was filed in court and signed by the judge on 1/11/19. Stipulation agreement defines alimony amount to be paid as well as includes the language that the parties agree for the alimony to be taxable to the recipient and deductible to the payer.

    Does this stipulation agreement the way it was written and dated takes precedence in making alimony received pursuant to this agreement to be subject to the “old” alimony rules?

    Thank you.

  • #158290
    Diane Martin
    Participant

    When does a taxpayer or judge get to over-ride tax law?  From what I have read – any alimony paid prior to the final divorce will probably be income.  But the divorce is a different legal document and any payments made or required to be made after date of divorce will have to follow TCJA law.

     

  • #158329
    Sandy Weiner
    Participant

    It’s unclear how the stipulation would be treated (we’re still awaiting guidance from the IRS), but many commentators are taking the position the alimony would be subject to the new TCJA rules.
    See our article on this issue: https://www.caltax.com/research/california-taxletter/2019/03/the-new-federal-alimony-rules/